Evaluating Phillips Curve Based Inflation Forecasts in Europe: A Note

Evaluating Phillips Curve Based Inflation Forecasts in Europe: A NoteWe run out-of-sample forecasts for the inflation rate of 15 euro-zone countries using a NAIRU Phillips curve and a naive reference model. Comparisons show that the naive model returns better forecasts in almost all cases. We provide evidence that the Phillips curves" goodness of fit is rather high. However, forecasting power is comparatively low. (C53, E31, E37