New method accurately predicts inflationary pressures in Peru, aiding economic stability.
The article estimates the gap between Peru's actual economic output and its potential output, which helps identify inflationary or disinflationary pressures. Researchers used a model that considers the relationship between the output gap and inflation rate, as well as structural constraints on output dynamics. The results suggest that this approach provides a more stable and accurate estimate of the output gap, showing a closer connection to inflation trends compared to traditional methods.