Central banks' inflation forecasts under asymmetric loss: Evidence from four Latin-American countries

Christian Pierdzioch, Jan-Christoph Rülke, Georg Stadtmann

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

We study the rationality of the inflation forecasts of the central banks of Argentina, Brazil, Chile, and Mexico. We reject rationality under a symmetric (Chile is an exception) but not under an asymmetric loss function. An overprediction implies a larger loss than an underprediction. We also analyze alternative rationality tests, growth forecasts, and private-sector forecasts.

Original languageEnglish
JournalEconomics Letters
Volume129
Pages (from-to)66-70
ISSN0165-1765
DOIs
Publication statusPublished - 2015

Keywords

  • Asymmetric loss
  • Central banks
  • Forecasting
  • Loss function

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