Modeling Commodity Prices, Inflation And Monetary Policy Response

Abstract

Inflation is generally defined as the rate of change of some price index. Well known examples are the Consumer Price Index, Wholesale Price Index and the personal consumption expenditure price Index. Measurement and forecasting of these indices has been a subject of ongoing debate and research in recent years. This paper attempts to contribute to the debate within the limits of an empirical and country specific. Section 1 deals with the transmission of Monetary policy to growth. Section 2 examines a simple model of inflation forecasting. Section 3 addresses the unfinished debate on Prices and Monetary management.