The new-Keynesian Phillips curve (NKPC) includes expected future inflation to explain current inflation. Such models are estimated by replacing the expected value by the future outcome, using Instrumental Variables or Generalized Method of Momentsmethods. However, the underlying theory does not...

We model UK price and wage inflation, productivity and unemployment over a century and ahalf of data, selecting dynamics, relevant variables, non-linearities and location and trend shifts using indicator saturation estimation. The four congruent econometric equations highlight complexinteracting...

Structural models' inflation forecasts are often inferior to those of naïve devices. This chapter theoretically and empirically assesses this for UK annual and quarterly inflation, using the theoretical framework in Clements and Hendry (1998, 1999). Forecasts from equilibrium-correction...