Employment and Inflation Responses to an Exchange Rate Shock in a Calibrated Model

Ireland has no ability to affect the exchange rate through interest rates following the adoption of the euro. This paper provides a theoretically transparent method for analysing the impact of an exchange rate shock on employment and the aggregate price level in this context. The split between the tradable and non-tradable sectors of the economy is highlighted. The model is used to examine a specific exchange rate shock. The results of this calibration suggest that a sustained increase of 15 per cent in the value of the euro would reduce employment by 1.5 per cent and the domestic price level by about 7.3 per cent.

How Useful is Core Inflation for Forecasting Headline Inflation?

The paper constructs various core inflation measures. These include various trimmed means using highly disaggregated data and a structural VAR estimate of core inflation for Ireland. The ability of these core inflation measures to forecast future headline inflation is compared using a simple regression model. An ARIMA model fitted to the headline inflation rate is used to construct the benchmark forecast. The forecasts from the ARIMA model are most accurate over short time horizons for monthly data. The structural VAR based estimate is most accurate over longer time horizons. For quarterly data, the structural VAR provides the optimal forecast over all time horizons considered.

A Critical Assessment of Existing Estimates of Core Inflation

Core inflation rates are widely calculated. The perceived benefit of core inflation rates is that they help to inform monetary policy. This is achieved by uncovering the underlying trend in inflation or by helping to forecast inflation. Studies which compare core inflation rates frequently assess candidate core rates on these two criteria. Using U.S. data, the two standard tests of core inflation - the ability to track trend inflation and the ability to forecast inflation -are applied to a more comprehensive set of core inflation rates than has been the case in the literature to date. Furthermore, the tests are applied in a more rigorous fashion. A key difference in this paper is the inclusion of benchmarks to the tests, which is non-standard in the literature. Two problems with core inflation rates emerge. Firstly, it is very difficult to distinguish between different core rates according to these tests, as they tend to perform to a very similar level. Secondly, once the benchmarks are introduced to the tests, the core inflation rates fail to outperform the benchmarks. This failure suggests that core inflation rates are of less practical usefulness than previously thought.

An Examination of Data Revisions in the Quarterly National Accounts

The paper presents a real time database of economic time series for Ireland. The database contains a record of what was considered official data at each point in time. The database is used to describe the properties of data revisions to the growth rates of GDP and its expenditure components in the Quarterly National Accounts. The revisions, although significant in an absolute sense, are small relative to average growth over the sample by international standards. Nonetheless, using the methodology of Mankiw et al (1984), it is found that initial estimates of GDP growth are not rational forecasts of final GDP growth. This means that there is a predictable element to the revisions. A number of rational forecasts of GDP growth are constructed using various forecasting regressions. It is found that forecasts of GDP growth estimated using the initial announcement and a measure of stock prices are more accurate reflections of true GDP growth than the initial announcements.

A Look at Data Revisions in the Quarterly National Accounts

The paper presents a real time database of economic time series for Ireland.

Employment and Inflation Responses to an Exchange Rate Shock in a Calibrated Model

Ireland has no ability to affect the exchange rate through interest rates since the adoption of the euro. This paper provides a theoretically transparent method for analysing the impact of an exchange rate shock on employment and inflation in this context. The split between the tradable and non-tradable sectors of the economy is highlighted. A small, calibrated model adapted from Barry (1997) is used in the paper. The equations in this paper are derived under less restrictive assumptions making the results more widely applicable. The parameters of the model can be changed easily to reflect the structure of the economy and to conduct scenario analyses. A practical application is provided using a specific calibration and set of assumptions and the sensitivity of the results to the calibrated parameters and assumptions is discussed.

How Useful is Core Inflation for Forecasting Headline Inflation?

The paper constructs various core inflation measures. These include various trimmed means using disaggregated data and a structural VAR estimate of core inflation for Ireland. The ability of these core inflation measures to forecast future headline inflation is compared using a regression model. An ARIMA model fitted to the headline inflation rate is used as the benchmark forecast. The forecasts from the ARIMA model are most accurate over short time horizons for monthly data. The structural VAR based estimate is most accurate over longer time horizons. For quarterly data, the structural VAR provides the optimal forecast over all time horizons.

Quantifying the Impact of Oil Prices on Inflation

The substantial increase in oil prices over the past six or seven years has provoked considerable comment within the international media. While this increase has not had quite the same impact as that experienced in the 1970's, the magnitude of the price increases still has significant implications from a macroeconomic perspective. This is particularly the case in terms of inflation. The re-emergence of the oil price issue necessitates a re-examination of econometric estimates of the influence of oil prices on inflation. We examine this issue in the case of a small open economy - that of Ireland.

Crowdsourced real-world sensing: sentiment analysis and the real-time web

The advent of the real-time web is proving both challeng- ing and at the same time disruptive for a number of areas of research, notably information retrieval and web data mining. As an area of research reaching maturity, sentiment analysis oers a promising direction for modelling the text content available in real-time streams. This paper reviews the real-time web as a new area of focus for sentiment analysis and discusses the motivations and challenges behind such a direction

An evaluation of the role of sentiment in second screen microblog search tasks

The recent prominence of the real-time web is proving both challenging and disruptive for information retrieval and web data mining research. User-generated content on the real-time web is perhaps best epitomised by content on microblogging platforms, such as Twitter. Given the substantial quantity of microblog posts that may be relevant to a user's query at a point in time, automated methods are required to sift through this information. Sentiment analysis offers a promising direction for modelling microblog content. We build and evaluate a sentiment-based filtering system using real-time user studies. We find a significant role played by sentiment in the search scenarios, observing detrimental effects in filtering out certain sentiment types. We make a series of observations regarding associations between document-level sentiment and user feedback, including associations with user profile attributes, and users' prior topic sentiment