MODELING MONTHLY INFLATION IN THE REPUBLIC OF SERBIA, MEASURED BY CONSUMER PRICE INDEX

Zorana Kostić, Vinko Lepojević, Vesna Janković-Milić

DOI Number
-
First page
145
Last page
159

Abstract


This paper presents a framework for the practical modeling of inflation, as one of the key economic indicators. Empirical research of monthly inflation trends in the Republic of Serbia was done covering the period from January 2007 to December 2015. The seasonally adjusted ARIMA model and Holt-Winters smoothing were used for determining the future values of the consumer price index, which has been a measure of inflation in the Republic of Serbia since January 2009. The main objective of the study is to create a model that will be used for analytical and forecasting purposes. The specific objective is the comparative analysis of accuracy of these two methods (Holt-Winters and ARIMA) in determining the future value of the consumer price index. The work relies on the theoretical results of dual relationship between AR (p) and MA (q) processes in determining the future values of consumer price index.

Keywords

consumer price index, inflation, forecasting, Holt-Winters smoothing method, ARIMA

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References


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