Nonlinear phillips curves in the Euro area and USA? Evidence from linear and neural network models
نویسنده
چکیده
This paper applies neural network methodology to inßation forecasting in the Euro-area and the USA. Neural network methodology outperforms linear forecasting methods for the Euro Area at forecast horizons of one, three, and six month horizons, while the linear model is preferable for US data. The nonlinear estimation shows that unemployment is a signiÞcant predictor of inßation for the Euro Area. Neither model detects a signiÞcant effect of unemployment on inßation for the US data. JEL ClassiÞcation: E31, C12
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