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Setting the Operational Framework for Producing Inflation Forecasts
Author:
Turgut Kisinbay null

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Mr. Eric Parrado null

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Mr. Rodolfo Maino
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Mr. Jorge I Canales Kriljenko
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Series:
IMF Working Papers
Volume/Issue:
Volume 2006: Issue 122
Language:
English
Publication Date:
01 May 2006
DOI:
https://doi.org/10.5089/9781451863826.001
ISBN:
9781451863826
ISSN:
1018-5941
Pages:
47
Keywords:
WP; policy reaction function; transmission mechanism; central bank authority; forecasting framework; monetary policy committee
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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How should a central bank organize itself to produce the best possible inflation forecast? This paper discusses elements for building a comprehensive platform for an inflation forecasting framework. It describes the exercise of forecasting inflation as a production process, which induces a strict discipline concerning data management, information gathering, the use of a suitable statistical apparatus, and the exercise of sound communication strategies to reinforce reputation and credibility. It becomes critical how a central bank organizes itself to produce relevant macroeconomic forecasts, with special consideration to product design, the essential requirements needed in the forecasting process, and key related organizational issues. In addition, the paper proposes to factor into the process the authorities' policy responses to previous inflation forecasts in order to be consistent with the spirit of the inflation targeting framework.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund