New Study Shows Nonparametric Model Outperforms Parametric Model in Inflation Forecasting
The article examines how inflation persistence is measured by looking at the relationship between core inflation and total inflation using real-time data. They used different methods to analyze data from two measures of inflation over various time periods. The study found that the nonparametric model performed better than the parametric model in predicting inflation for both data samples and across different forecast horizons.