|
| |
| Paul Carrillo-Maldonado, Jeniffer Rubio and Susana Herrero-Olarte |
| |
| ''External vs. domestic factors to forecast the inflation in dollarized economy'' |
| ( 2026, Vol. 0 No.0 ) |
| |
| |
| In this paper we evaluate the influence of external and domestic factors for forecasting inflation in a small, open and dollarized economy. We estimate different econometric models for time series to identify the precision to forecast the inflation of Ecuadorian economy. We also implemented least square, quantile regression and stochastic volatility proposals to compare the same specification. The results show that models that include external factors are more accurate in the short term, while in the medium term, it is explained more by internal factors. Quantile regression is practical because it captures the determinants of inflation at different levels. |
| |
| |
| Keywords: Inflation, Forecasting, External factors, domestic variables, small-open economy, Ecuador. |
JEL: E3 - Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data)
F4 - Macroeconomic Aspects of International Trade and Finance: General |
| |
| Manuscript Received : Feb 11 2025 | | Manuscript Accepted : Jan 06 2026 |
|
