We dissect the impact of a large and sudden exchange rate appreciation on Swiss border import prices, retail consumer expenditures domestic imported nondurable goods, following removal EUR/CHF floor in January 2015. Cross-sectional variation price changes by currency invoicing carries over to prices allocations, impacting imports competing as well expenditures. provide measures sensitivity shar...

K e y w o r d s: prediction, model comparison, density forecasting, inflation, VAR models, shrinkage. J E L Classification: E31, E37, C53, C32.

Within a unified framework, the author conducts an empirical investigation of dynamic interrelationships among inflation, inflation uncertainty, relative price dispersion, and output growth. Focusing on the Canadian industrial sector, the author finds weak evidence that inflation uncertainty rises with the level of inflation, with short-run inflation uncertainty minimized at a trend inflation r...

This paper – which takes into consideration overall experience with the Harmonised Index of Consumer Prices (HICP) as well improvements made to this measure inflation since 2003 finds that HICP continues fulfil prerequisites for index underlying ECB’s definition price stability. Nonetheless, there is scope enhancing HICP, especially by including owner-occupied housing (OOH) using net acquisitio...

We develop a multi-sector sticky-price DSGE model that can endogenously deliver differential responses of prices to aggregate and sectoral shocks. Input-output production linkages induce across-sector pricing complementarities that contribute to a slow response of prices to aggregate shocks. In turn, labor-market segmentation at the sectoral level induces within-sector pricing substitutability,...

This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. This paper forecasts inflation in Sudan following two methodo...

This paper utilizes the nonparametric functional autoregressive approach (FAR) to model the time-varying distribution of UK monthly inflation rates using disaggregated cross-sectional data. Our approach is free of any assumptions on the class or structure of the density functions themselves, or the number of dimensions in which the densities may vary. The “pseudo real time” in-sample forecastin...

We developed a simple monetary model to study the effects of tax evasion on the optimal inflation tax. The model is constructed so that inflation might be an indirect way of taxing the underground sector of the economy. We show that while there are theoretical reasons for positive optimal inflation rates, the effects are quantitatively small, even in countries with large underground sectors. We...

Inflation Adjustment and Labour Market Structures: Evidence from a Multi-Country Study An empirical analysis of the impact of labour market structures on the response of inflation to macroeconomic shocks is presented. Results based on a 20 country panel show that if labour market coordination is high, the effect on inflation of movements in unemployment, import prices, tax rates and productivit...

Ito has applied the non-Walrasian regime switching methodology to the Solovian neoclassical growth model and discussed the occurrence of regimes of full employment, overemployment and underemployment and the different dynamical systems (to be patched up) these regimes give rise to. We shall show in this paper that nothing of this sort really characterizes Solovian growth with non market-clearin...