Publicação
Navigating with a compass
| Resumo: | We propose a novel tool to gauge price pressures resorting to circular statistics, the inflation compass. It offers a reliable indication of inflationary pressures in the euro area since its inception. Unlike most alternative measures of underlying inflation, the inflation compass does not exclude any inflation subitems. Moreover, it is not revised, providing real-time signals about the course of underlying inflation. We also provide evidence of the usefulness of the inflation compass to forecast overall inflation, even during periods of increased turbulence, such as the COVID-19 pandemic or the recent inflation surge. Lastly, our approach can handle large-dimensional data straightforwardly. |
|---|---|
| Autores principais: | Lourenço, Nuno |
| Outros Autores: | Quelhas, João; Rua, António |
| Assunto: | Finance Economics and Econometrics |
| Ano: | 2025 |
| País: | Portugal |
| Tipo de documento: | artigo |
| Tipo de acesso: | acesso aberto |
| Instituição associada: | Universidade Nova de Lisboa |
| Idioma: | inglês |
| Origem: | Repositório Institucional da UNL |
| Resumo: | We propose a novel tool to gauge price pressures resorting to circular statistics, the inflation compass. It offers a reliable indication of inflationary pressures in the euro area since its inception. Unlike most alternative measures of underlying inflation, the inflation compass does not exclude any inflation subitems. Moreover, it is not revised, providing real-time signals about the course of underlying inflation. We also provide evidence of the usefulness of the inflation compass to forecast overall inflation, even during periods of increased turbulence, such as the COVID-19 pandemic or the recent inflation surge. Lastly, our approach can handle large-dimensional data straightforwardly. |
|---|
Atividades financiadas
Não foram encontrados projetos financiados.