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Inflation Dynamics in the Western Balkans

Minasyan, Gohar; Ozturk, Ezgi O.; Pinat, Magali; Wang, … - 2023

After trailing Euro Area inflation closely in the recent past, inflation in the Western Balkans has accelerated faster since early 2022 on the back of the shocks to global commodity prices, strong recovery from the pandemic, and lingering supply bottlenecks. This paper employs two complementary...

Persistent link: https://econbiz.de/10014256591

2022 Update of the External Balance Assessment Methodology

Allen, Cian; Casas, Camila; Ganelli, Giovanni; Juvenal, … - 2023

The assessment of external positions and exchange rates of member countries is a key mandate of the IMF. The External Balance Assessment (EBA) methodology has provided the framework for conducting external sector assessments by Fund staff since its introduction in 2012. This paper provides the...

Persistent link: https://econbiz.de/10014256592

Identifying Optimal Indicators and Lag Terms for Nowcasting Models

Xie, Jing - 2023

Many central banks and government agencies use nowcasting techniques to obtain policy relevant information about the business cycle. Existing nowcasting methods, however, have two critical shortcomings for this purpose. First, in contrast to machine-learning models, they do not provide much if...

Persistent link: https://econbiz.de/10014256593

Weighted Median Inflation Around the World : A Measure of Core Inflation

Ball, Laurence M.; Carvalho, Carlos Viana de; Evans, … - 2023

The standard measure of core or underlying inflation is the inflation rate excluding food and energy prices. This paper constructs an alternative measure, the weighted median inflation rate, for 38 advanced and emerging economies using subclass level disaggretion of the CPI over 1990-2021, and...

Persistent link: https://econbiz.de/10014256872

Surrogate Data Models : Interpreting Large-Scale Machine Learning Crisis Prediction Models

Chan-Lau, Jorge A.; Hu, Ruofei; Ivanyna, Maksym; Qu, Ritong - 2023

Machine learning models are becoming increasingly important in the prediction of economic crises. The models, however, use datasets comprising a large number of predictors (features) which impairs model interpretability and their ability to provide adequate guidance in the design of crisis...

Persistent link: https://econbiz.de/10014256873

AI and Macroeconomic Modeling : Deep Reinforcement Learning in an RBC Model

Atashbar, Tohid; Aruhan Shi, Rui - 2023

This study seeks to construct a basic reinforcement learning-based AI-macroeconomic simulator. We use a deep RL (DRL) approach (DDPG) in an RBC macroeconomic model. We set up two learning scenarios, one of which is deterministic without the technological shock and the other is stochastic. The...

Persistent link: https://econbiz.de/10014256874

Global Supply Chain Disruptions : Challenges for Inflation and Monetary Policy in Sub-Saharan Africa

Andriantomanga, Zo; Bolhuis, Marijn; Hakobyan, Shushanik - 2023

The Covid-19 pandemic has led to a large disruption of global supply chains. This paper studies the implications of supply chain disruptions for inflation and monetary policy in sub-Saharan Africa. Increases in supply chain pressures have had a sizeable impact on headline, food, and tradable...

Persistent link: https://econbiz.de/10014256875

Guaranteeing Trade in a Severe Crisis : Cash Collateral Over Bank Guarantees

Kotidis, Antonis; MacDonald, Margaux; Malliaropulos, … - 2023

Banks guarantee international trade through letters of credit. This paper analyzes what happens to trade when the critical role of banks as trade guarantors is compromised. Using the case of the Greek capital controls in 2015, the events around which led to a massive loss of confidence in the...

Persistent link: https://econbiz.de/10014256876

Bubble Detective : City-Level Analysis of House Price Cycles

Cevik, Serhan; Naik, Sadhna - 2023

This paper investigates house price dynamics at high frequency using city-level observations during the period 1994-2022 in Lithuania. We employ multiple time series-based econometric procedures to examine whether real house prices and house price-to-rent ratios exhibit explosive behavior....

Persistent link: https://econbiz.de/10014257254

The 2020-2022 Inflation Surge Across Europe : A Phillips-Curve-Based Dissection

Baba, Chikako; Duval, Romain; Lan, Ting; Topalova, Petia B. - 2023

In 2021-22, inflation in Europe soared to multidecade highs, consistently exceeding policymakers’ forecasts and surprising with its wide cross-country dispersion. This paper analyzes the key drivers of the inflation surge in Europe and its variation across countries. The analysis highlights...

Persistent link: https://econbiz.de/10014257255