modeling, we construct the area-wide indicators by utilizing weights that minimize the variance of the out-of-sample forecast … errors of the area-wide target variable. In an out-of-sample forecast experiment we find that our optimal pooling of … information approach outperforms alternative forecasting methods in terms of forecast accuracy. -- Forecasting ; aggregation …

(underpredict) inflation at intermediate forecast horizons when inflation is below (above) target. The magnitude of the bias is …