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Forecast the inflation rate in Lebanon: The use of the artificial neural networks method

Author

Listed:
  • Jean-François Verne

    (Université Saint-Joseph de Beyrouth, Faculté de Sciences Economiques)

Abstract

In this article, we use the neural network method to analyze the inflation rate evolution in Lebanon between December 2008 to January 2022. We particularly use the Nonlinear Autoregressive model, called NAR, which belongs to the models of Artificial Neural Networks (ANN), to make predictions of the inflation rate in Lebanon over a twelve-month period. Then, we compare the goodness of fit of these predictions from such a model with that obtained by the seasonal ARIMA model. Thus, the NAR model generates better results, in terms of forecasting and adjustment of the estimated data to the observed data than those achieved with the linear seasonal ARIMA model.

Suggested Citation

  • Jean-François Verne, 2022. "Forecast the inflation rate in Lebanon: The use of the artificial neural networks method," Economics Bulletin, AccessEcon, vol. 42(4), pages 1798-1810.
    • Handle: RePEc:ebl:ecbull:eb-22-00330
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    References listed on IDEAS

    as
    1. David I. Harvey & Stephen J. Leybourne, 2007. "Testing for time series linearity," Econometrics Journal, Royal Economic Society, vol. 10(1), pages 149-165, March.
    2. Ghorban Shahriary & Yaser Mir, 2016. "Application of Artificial Neural Network Model in Predicting Price of Milk in Iran," Modern Applied Science, Canadian Center of Science and Education, vol. 10(4), pages 173-173, April.
    3. Jean-François Verne & Carole Doueiry Verne, 2019. "Chaos in Lebanese GDP: The Lorenz Attractor Approach," Economics Bulletin, AccessEcon, vol. 39(3), pages 1958-1967.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Inflation rate; Neural Networks; Forecast; Autoregressive models;
    All these keywords.

    JEL classification:

    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles

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