indicators in predicting euro area HICP inflation out-of-sample over the period first quarter 1999 till third quarter 2006 …

We develop a time-varying transition probabilities Markov Switching model in which inflation is characterised by two … regimes (high and low inflation). Using Bayesian techniques, we apply the model to the euro area, Germany, the US, the UK and … switches between inflation regimes. Thus money growth provides an important early warning indicator for risks to price …

qualitative and quantitative information on subsequent inflation. The usefulness of monetary analysis is contrasted to weaknesses … in modeling monetary policy and inflation with respectively short-term interest rates and real activity measures. The … analysis sheds light on the recent change in inflation volatility and persistence as well as on the Phillips curve flattening …

equilibrium values having explanatory power for subsequent consumer price inflation …