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Modeling Inflation in Australia

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  • de Brouwer, Gordon
  • Ericsson, Neil R
Abstract
This article develops an empirically constant, data-coherent, error-correction model for inflation in Australia. The level of consumer prices is a markup over domestic and import costs, with adjustments for dynamics and relative aggregate demand. The authors address issues of cointegration, general to specific modeling, dynamic specification, model evaluation and testing, parameter constancy, forecasting, and exogeneity. They also test this model against existing models of Australian prices: this model encompasses, but is not encompassed by, the existing models.

Suggested Citation

  • de Brouwer, Gordon & Ericsson, Neil R, 1998. "Modeling Inflation in Australia," Journal of Business & Economic Statistics, American Statistical Association, vol. 16(4), pages 433-449, October.
    • Handle: RePEc:bes:jnlbes:v:16:y:1998:i:4:p:433-49
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