Monetary Policy and Leading Indicators of Inflation in Sweden [electronic resource] / Josef Baumgartner.
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TextSeries: IMF Working Papers; Working Paper ; No. 97/34Publication details: Washington, D.C. : International Monetary Fund, 1997Description: 1 online resource (31 p.)ISBN: 1451978928 :ISSN: 1018-5941Subject(s): Inflation Targeting | Leading Indicators | Monetary Aggregates | Monetary Indicators | SwedenAdditional physical formats: Print Version:: Monetary Policy and Leading Indicators of Inflation in SwedenOnline resources: IMF e-Library | IMF Book Store Abstract: This paper derives a set of leading indicators of inflation for Sweden. It also discusses methodological and policy issues pertaining to the estimation of these indicators. The main findings are: (1) narrow money is the most powerful leading inflation indicator; (2) broad money and inflation expectations have significant predictive information on inflation; (3) the output gap, interest rates, and the credit aggregate have some predictive information on inflation, and this information is confined to a shorter time horizon than either the monetary aggregates or inflation expectations; and (4) implied forward rates have only weak predictive information on inflation.
This paper derives a set of leading indicators of inflation for Sweden. It also discusses methodological and policy issues pertaining to the estimation of these indicators. The main findings are: (1) narrow money is the most powerful leading inflation indicator; (2) broad money and inflation expectations have significant predictive information on inflation; (3) the output gap, interest rates, and the credit aggregate have some predictive information on inflation, and this information is confined to a shorter time horizon than either the monetary aggregates or inflation expectations; and (4) implied forward rates have only weak predictive information on inflation.
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