Monetary Policy and Leading Indicators of Inflation in Sweden

31 Pages Posted: 15 Feb 2006

See all articles by Josef Baumgartner

Josef Baumgartner

Austrian Institute of Economic Research (WIFO)

Ramana Ramaswamy

International Monetary Fund (IMF) - Asia and Pacific Department

Göran Zettergren

affiliation not provided to SSRN

Date Written: April 1997

Abstract

This paper derives a set of leading indicators of inflation for Sweden. It also discusses methodological and policy issues pertaining to the estimation of these indicators. The main findings are: (1) narrow money is the most powerful leading inflation indicator; (2) broad money and inflation expectations have significant predictive information on inflation; (3) the output gap, interest rates, and the credit aggregate have some predictive information on inflation, and this information is confined to a shorter time horizon than either the monetary aggregates or inflation expectations; and (4) implied forward rates have only weak predictive information on inflation.

Keywords: Sweden, inflation, leading indicators

JEL Classification: E5, E52, C5

Suggested Citation

Baumgartner, Josef and Ramaswamy, Ramana and Zettergren, Göran, Monetary Policy and Leading Indicators of Inflation in Sweden (April 1997). IMF Working Paper No. 97/34, Available at SSRN: https://ssrn.com/abstract=882274

Josef Baumgartner (Contact Author)

Austrian Institute of Economic Research (WIFO) ( email )

P.O. Box 91
Wien, A-1103
Austria

Ramana Ramaswamy

International Monetary Fund (IMF) - Asia and Pacific Department ( email )

700 19th Street NW
Washington, DC 20431
United States

Göran Zettergren

affiliation not provided to SSRN

No Address Available

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