modifies a wage–price-setting (WPS) model to forecast U.S. inflation over one- to three-year horizons. The out …-of-sample forecast results show that productivity growth is a useful predictor of inflation, in the sense that the modified WPS model … improves upon some univariate benchmark models during the 1990Q1–2020Q2 period. Since the early 2000s, forecast accuracy can be …

, introducing slack into models estimated using headline PCE inflation data or conventional core inflation data causes forecast …