This paper implements recursive techniques to estimate the equilibrium level of M2 velocity and to forecast inflation …-time forecasts of inflation and evaluate the performance of the forecasts obtained from the alternative models. We find that while a … P* model assuming a constant equilibrium velocity does not provide accurate inflation forecasts in the 1990s, a model …

the inflation rate, the deviation in real GDP (Gross Domestic Product), the deviation in money supply, the deviation in … weight to the deviation in unemployment rate, and moderate weights are assigned to the deviation in the inflation rate, the …