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Inflation dynamics in Jamaica: Evidence from the ARMA methodology

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  • NYONI, THABANI

Abstract

This research uses annual time series data on inflation rates in Jamaica from 1968 to 2017, to model and forecast inflation using ARMA models. Diagnostic tests indicate that JINF is I(0). The study presents the ARMA (1, 0, 0) model, which is the same as an AR (1) process. The diagnostic tests further imply that the presented optimal ARMA (1, 0, 0) model is stable and acceptable for forecasting inflation rates in Jamaica. The results of the study apparently show that JINF will be approximately 11.42% by 2020. Policy makers in Jamaica are expected to the take the necessary action with regards to maintaining a low and stable inflation rate over the next decade and even beyond.

Suggested Citation

  • Nyoni, Thabani, 2019. "Inflation dynamics in Jamaica: Evidence from the ARMA methodology," MPRA Paper 92449, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:92449
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    References listed on IDEAS

    as
    1. Christian Buelens, 2012. "Inflation forecasting and the crisis: assessing the impact on the performance of different forecasting models and methods," European Economy - Economic Papers 2008 - 2015 451, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    2. Mohamed Fenira, 2014. "Democracy: A Determinant Factor in Reducing Inflation," International Journal of Economics and Financial Issues, Econjournals, vol. 4(2), pages 363-375.
    3. Nyoni, Thabani, 2018. "Modeling and Forecasting Inflation in Zimbabwe: a Generalized Autoregressive Conditionally Heteroskedastic (GARCH) approach," MPRA Paper 88132, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Forecasting; inflation; Jamaica;
    All these keywords.

    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • E47 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Forecasting and Simulation: Models and Applications

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