The Problem of the Yearly Inflation Rate and Its Implications for the Monetary Policy of the Czech National Bank

Arlt, Josef; Bašta, Milan

doi:10.18267/j.pep.366

Cited by 6 publications

(2 citation statements)

References 6 publications

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“…The author of this paper has raised the issue of the annual rate of inflation in previous studies; see Arlt (1998), Arlt and Bašta (2008, 2010). Over the years of research, he came across only one article focusing on the topic of the annual inflation rate.…”

Section: Introductionmentioning

confidence: 99%

The problem of annual inflation rate indicator

Arlt

2021

Int. J Fin Econ

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In economic practice, the annual inflation rate is commonly used. As a onesided moving average of the annualized inflation rate, it is approximately 6 months behind the annualized and monthly inflation rates and the CPI. The annual rate of inflation is, in fact, a smoothing transformation that removes the seasonal component from the annualized inflation rate, assuming the presence of all seasonal unit roots. In reality, however, the CPIs, and thus the annualized inflation rates, do not contain most of seasonal unit roots, resulting in spurious cycles of annual inflation rates, which pose difficulties in assessing and interpreting their development dynamics. Their practical applications in econometric analyses are limited because the unit root tests too often do not reject the zero hypothesis of the presence of unit roots when annual inflation rates are actually stationary. Parameter estimates of the annual inflation rate models are biased and inaccurate, allowing only incorrect short-term forecasts.The above facts make use of the annual inflation rate indicator in real economic situations questionable.

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Section: Introductionmentioning

confidence: 99%

The problem of annual inflation rate indicator

Arlt

2021

Int. J Fin Econ

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“…Jorddan et al (2007) used the GARCH model for analyzing price fluctuation for agricultural products and implied that those farmers who showed a risk-averse behaviour are willing to produce wheat and soybean, while those farmers, who are not as risk averse as the first group, are willing to produce white and yellow corn and sunflower seed. Pop and Ban (2011) Arlt and Bašta (2010) used the harmonic analysis in their study to show that the yearly inflation rate might not always be an appropriate measure of inflation for the monetary policy of the Czech National Bank. The harmonic analysis shows that the yearly inflation rate deforms and delays the information with respect to the monthly inflation rate and it is thus delayed behind the true inflation at yearly levels.…”

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Determining fluctuations and cycles of corn price in Iran

Behzad¹,

Farsi²,

Kojouri³

2013

AGR ECON-CZECH

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Abstract:Corn is the third important agricultural product. It is an important input in the poultry production and the basic elements of edible oil, starch, glucose, and raw material in industrial production of ethanol and some other products. Th e aim of this study is to fi nd strategies to avoid price volatility, hence, the harmonic method has been used to investigate the corn price cycle and the GARCH model has been used to investigate its fl uctuation. Th e harmonic method results showed long-term cycles in the period of 21 months in analyzing the period and the GARCH model result indicated that the corn price fl uctuations causes more fl uctuations in the corn future prices, in addition the error terms that have less contribution in the conditional variance. Based on the characteristics of the corn price variation obtained in this study, the policymakers should provide a proper condition to encourage sellers and buyers to deal in the Agricultural Mercantile Exchange and use future and option contract to control the price volatilities.

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False inflation spiral and the banking sector

Polyakova¹,

Khisamov²

2022

Proceedings of the Ii International Scientific Conference on Advances in Science, Engineering and Digital Education: (Asedu-Ii

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The Problem of the Yearly Inflation Rate and Its Implications for the Monetary Policy of the Czech National Bank

Cited by 6 publications

References 6 publications

The problem of annual inflation rate indicator

The problem of annual inflation rate indicator

Determining fluctuations and cycles of corn price in Iran

False inflation spiral and the banking sector

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