Ahn, Young Bin
We evaluate the directional accuracy of inflation forecasts based on the survey data of urban savings account holders in China. By using a new market-timing test, we show that the urban consumers' expectations of inflation are not as useful predictor of the overall consumer price index (CPI) and the urban household CPI (U-CPI) in China. However, after our in-depth analysis using the inflation rate of each cagtegory in the U-CPI basket, we find that the consumers' forecasts are useful in predicting the movement of the residence component in the U-CPI basket since the third quarter of 2009.
Chinese urban cosnumers' inflation forecasts, directional analysis, residence category, survey data, urban household consumer price index (CPI) basket
Ahn, Young Bin: Directional Accuracy of Urban Consumers’ Inflation Forecasts in China, in: Emerging Markets Finance and Trade, Vol. 54 (6), pp. 1414 - 1424, 2018