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Thursday, February 06, 2014

'Do Oil Prices Predict Inflation?'

Apparently not:

Do Oil Prices Predict Inflation?, by Mehmet Pasaogullari and Patricia Waiwood, FRB Cleveland: Some analysts pay particular attention to oil prices, thinking they might give an advance signal of changes in inflation. However, using a variety of statistical tests, we find that adding oil prices does little to improve forecasts of CPI inflation. Our results suggest that higher oil prices today do not necessarily signal higher CPI inflation next year, although they do help to explain short-term movements in the CPI. ...

    Posted by on Thursday, February 6, 2014 at 03:51 AM in Economics, Inflation, Oil | Permalink  Comments (5)


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