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In the framework of a standard overlapping generations model, it is shown that active inflation forecast targeting …-age consumption. The inflation forecast targeting rule which minimizes the volatility of inflation can be active or passive, depending … on the characteristics of shocks and the risk aversion of households. Inflation forecast errors are always greater under …
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This paper examines the asymptotic and finite-sample properties of tests of equal forecast accuracy when the models being compared are overlapping in the sense of Vuong (1989). Two models are overlapping when the true model con- tains just a subset of variables common to the larger sets of...
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This paper examines the asymptotic and fi nite-sample properties of tests of equal forecast accuracy when the models being compared are overlapping in the sense of Vuong (1989). Two models are overlapping when the true model contains just a subset of variables common to the larger sets of...
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