Learning Trend Inflation – Can Signal Extraction Explain Survey Forecasts?

It can be shown that inflation expectations and associated forecast errors are characterized by a high degree of persistence. One reason may be that forecasters cannot directly observe the inflation target pursued by the central bank and, hence, face a complicated forecasting problem. In particular, they have to infer whether the observed movement ofthe inflation rate is due to a permanent change of policy parameters or whether it is the result of a transient shock. Consequently, it is assumed that agents behave like econometricians who filter noisy information by estimating an unobserved components model. This constitutes the trend learning algorithm employed by the forecaster. To examine whether this is a valid assumption, I fit a simple learning model to US survey expectations. The second part contains an out-of-sample forecasting experiment which shows that learning by signal extraction matches survey measures closer than other standard models. Moreover, it turns out that a weighted average of different expectation formation processes with a prominent role for signal extraction behaviour is well suited to explain survey measures of inflation expectations.

Crowded or Empty Spaces? The Statuary Decoration of the ‘Palaestrae’ in Pompeii and Herculaneum

Während die Skulpturenausstattung von Palästren und Gymnasien im östlichen Mittelmeer in der Forschung viel Aufmerksamkeit erfahren hat, ist das Thema für die westlichen Pendants bislang nicht umfassend untersucht worden. Dieser Beitrag analysiert die Skulpturenausstattung der Samnitischen Palästra und der Großen Palästra in Pompeji sowie der Palästra in Herculaneum. Existenz und Charakter der Skulpturenprogramme werden untersucht ebenso wie die umstrittene Frage, ob die Skulpturen angemessen für die Sportbauten waren und sogar die problematische Identifizierung dieser Bauten als Palästren bestätigen können. Es zeigt sich, dass die Skulpturenausstattung aller drei Bauten erheblich von der in östlichen Pendants differiert. Dies legt nahe, die Benennung dieser ‚Palästren‘ zu überdenken

The Virtues of VAR Forecast Pooling – A DSGE Model Based Monte Carlo Study

Since the seminal article of Bates and Granger (1969), a large number of theoretical and empirical studies have shown that pooling different forecasts of the same event tends to outperform individual forecasts in terms of forecast accuracy. However, the results remain heterogenous regarding the size of gains. As there are numerous sources for the large variation of the resulting gains, it is difficult to estimate the improvement in accuracy based on empirical findings. Consequently, we use Monte Carlo techniques which enable us to identify the gains of pooling from VAR forecasts under lab conditions. In particular, the results are allowed to vary with respect to sample size, forecast horizon, number of pooled forecasts, weighting scheme and structure of the model economy. Given strict lab conditions, our setup of the experiment yields a quantification of the virtues that can be obtained in almost any forecast situation. The analysis shows that pooling leads to a substantial reduction of MSE of about 20%, which is comparable to the elimination of estimation uncertainty. Most notably, this reduction is already obtained with an average of about four different forecasts.Pooling of forecasts, model uncertainty, VAR model, Monte Carlo Study

An Alternative to the Carlson-Parkin Method for the Quantification of Qualitative Inflation Expectations: Evidence from the Ifo World Economic Survey

This paper presents a new methodology for the quantification of qualitative survey data. Traditional conversion methods, such as the probability approach of Carlson and Parkin (1975) or the time-varying parameters model of Seitz (1988), require very restrictive assumptions concerning the expectations formation process of survey respondents. Above all, the unbiasedness of expectations, which is a necessary condition for rationality, is imposed. Our approach avoids these assumptions. The novelty lies in the way the boundaries inside of which survey respondents expect the variable under consideration to remain unchanged are determined. Instead of deriving these boundaries from the statistical properties of the reference time-series (which necessitates the unbiasedness assumption), we directly queried them from survey respondents by a special question in the Ifo World Economic Survey. The new methodology is then applied to expectations about the future development of inflation obtained from the Ifo World Economic Survey.Inflation expectations, survey data, quantification methods.

The New Keynesian Phillips Curve and the Role of Expectations: Evidence from the Ifo World Economic Survey

We provide evidence on the fit of the hybrid New Keynesian Phillips curve for selected euro zone countries, the US and the UK. Instead of imposing rational expectations and estimating the Phillips curve by the Generalized Method of Moments, we follow Roberts (1997) and Adam and Padula (2003) and use direct measures of inflation expectations. The data source is the Ifo World Economic Survey, which quarterly polls economic experts about their expected future development of inflation. Our main findings are as follows: (i) In comparison with the rational expectations approach, backward-looking behaviour turns out to more relevant for most countries in our sample. (ii) The use of survey data for inflation expectations yields a positive slope of the Phillips curve when the output gap is used as a measure for marginal cost.inflation expectations, survey data, euro zone, Phillips curve

Inflation uncertainty revisited: A proposal for robust measurement

Any measure of unobserved inflation uncertainty relies on specific assumptions which are most likely not fulfilled completely. This calls into question whether an individual measure delivers a reliable signal. To reduce idiosyncratic measurement error, we propose using common information contained in different measures derived from survey data, a variety of forecast models, and volatility models. We show that all measures are driven by a common component which constitutes an indicator for inflation uncertainty. Moreover, the idiosyncratic component of survey disagreement contains systematic measurement error during economic downturns. Finally, we study the Friedman-Ball hypothesis. Using the indicator, it turns out that higher inflation is followed by higher uncertainty. By contrast, we obtain contradictory results for the individual measures. We also document that, after an inflationary shock, uncertainty decreases in the first two months which is traceable to the energy component in CPI inflation.Inflation uncertainty, inflation, survey data, stochastic volatility, GARCH, principal component analysis

„… drum sehnt sie sich nur nach der Liebe – pfui Teufel!“ : Domestizierung durch Kunst in Carl Froelichs HEIMAT (1938)

Am 5.9.1940 erhielt Carl Froelich anlässlich seines 65. Geburtstags aus den Händen von Joseph Goebbels die Goethe-Medaille für Kunst und Wissenschaft. Goebbels hatte diese Ehrung zwei Tage zuvor in einem Schreiben an den Staatsminister und Chef der Präsidialkanzlei des Führers und Reichskanzlers Otto Meißner wie folgt begründet: Mit der technischen Beherrschung des Stoffes verbindet Froelich eine hervorragende künstlerische Begabung, die ihn befähigte, schon seit vielen Jahren sowohl als Regisseur wie als Produzent zahlreiche bedeutsame Filme herzustellen. Unter seinen bekanntesten Filmen sind vor allem zu nennen: Reifende Jugend (1933), Traumulus (1935), Wenn wir alle Engel wären (1936) und Heimat (1938). In Anerkennung des künstlerischen und staatspolitischen Wertes seiner Filme wurde Carl Froelich am 30. Jan. 1937 der Professoren-Titel verliehen. Aufgrund des großen Ansehens, das er im gesamten Bereich des Filmes genießt, wurde er am 29. Juni 1939 zum Präsidenten der RFK bestellt, die er seitdem ehrenamtlich leitet. (Barch, R 55/96, Bl. 373) Für Froelich war dies der Höhepunkt der Karriere: Aus dem Kameramann bei Oskar Meßter (ab 1906) und dem selbständigen Produzenten und Regisseur (ab 1920) war ein hoch dekorierter Funktionär geworden. Voraussetzung dafür war nicht nur der Eintritt in die NSDAP, sondern auch die enge Zusammenarbeit des Tonfilm-Studio Carl Froelich&Co mit der Ufa

A Comparison and Contrast of the History of Christianity as it Developed in Cappadocia and Armenia during the First Five Centuries AD

The purpose of this thesis is to examine key political, cultural or environmental factors which affected the rise and development of Christianity in two specific regions of eastern Anatolia during the first to fifth centuries AD. Hagiography and chronicle often portray the progress of Christianity as deterministic and providential. However, unique cultural and political elements proved very influential in shaping the success and forms of Christianity in Cappadocia and Armenia, particularly in the fourth and fifth centuries AD

The Importance Of Incorporating Nutrition Education Programs In Elementary Schools

Throughout the United States childhood obesity has become a major concern. The amount of unhealthy foods children are consuming is the highest it has even been. Eating unhealthily has proven to affect children in school, both academically and behaviorally. For this applied project, the importance of incorporating nutrition education programs in elementary schools was questioned and investigated. The Nutrition Education Program was designed and proposed to effectively teach children the importance of maintaining healthy diets. This program was also made to be user friendly for all elementary general education teachers. The program was presented to six people; two administrators, two general education teachers, and two parents, all of whom have an interest in successful elementary school education practices. These individuals assessed the applicability and usability of the Nutrition Education Program in their schools and classrooms