Forecasting euro area inflation with machine-learning models
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Mercredi, janvier 3, 2024
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The strategy review concluded in 2021 highlighted how most Eurosystem models used to forecast inflation are linear.
Key Points:
- The strategy review concluded in 2021 highlighted how most Eurosystem models used to forecast inflation are linear.
- Linear models assume that changes in, for example, wages, always have the same fixed, proportional effect on inflation.