Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/209779
Authors: 
Bårdsen, Gunnar
Jansen, Eilev S.
Nymoen, Ragnar
Year of Publication: 
2001
Series/Report no.: 
Arbeidsnotat No. 2000/6
Abstract: 
Three classes of inflation models are discussed: Standard Phillips curves, New Keynesian Phillips curves and Incomplete Competition models. Their relative merits in explaining and forecasting inflation are investigated theoretically and empirically. We establish that Standard Phillips-curve forecasts are robust to types of structural breaks that harm the Incomplete Competion model forecasts, but exaggerates forecast uncertainty in periods with no breaks. As the potential biases in after-break forecast errors for the Incomplete Competition model can be remedied by intercept corrections, it offers the best prospect of successful inflation forecasting.
Subjects: 
monetary policy
inflation targeting
wages and prices
model specification
encompassing
model uncertainty
forecasting
JEL: 
C32
C51
C52
C53
E31
E52
Persistent Identifier of the first edition: 
ISBN: 
82-7553-163-2
Creative Commons License: 
https://creativecommons.org/licenses/by-nc-nd/4.0/deed.no
Document Type: 
Working Paper
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