Journal Article

P*: not the inflation forecaster's holy grail

Abstract: This paper describes and evaluates P-Star (P*), a new method to forecast inflation trends which was introduced by the Federal Reserve Board of Governors in the summer of 1989. The paper examines how well P* would have done, compared with eight other forecasting methods, had all of these methods been used to forecast inflation in the 1970s and 1980s. P* turns out to be not an exceptionally good or bad way to forecast inflation.

Keywords: Forecasting; Inflation (Finance);

Bibliographic Information

Provider: Federal Reserve Bank of Minneapolis

Part of Series: Quarterly Review

Publication Date: 1989

Volume: 13

Issue: Fall

Pages: 3-18