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Sunday, October 15, 2006

Is inflation increasing in the UK?

I had a look at recent UK CPI data and made a simple forecast. The data is monthly annualised CPI rates from the ONS. The most recent data point is August 2006.

The model is a simple AR(12). As the graph shows CPI is predicted to increase and reach the 1988-2006 mean of 2.7%.

Can the oil price be the underlying factor?

British econometrician

Britain's most prominent microeconometrician is Richard Blundell. He is head of economics at UCL, research director at IFS and also president of the Econometric Society.

Being 54 he has published a vast amount of articles on labour economics and related fields. Looking at his IFS website one is astonished at the multiple fields he has written on. He is a true public microeconometrician being aware of the various facets of policy analysis.

Have you come across any of his work which has particularly impressed you?

Tuesday, October 10, 2006

Nobel Prize in Economics II

The Nobel Prize has been announced. It goes to the US macroeconomist Edmund Phelps. It was only in 2004 that the prize went to two other macroeconomists: Kydland and Prescott.

It is also seven years since the Prize went to a single person (1999 to Mundell).

Phelps is famous for his work on the inflation-unemployment trade-off, that is the extension of the Phillips curve. Actually every first year economics student knows about Phelps' work without knowing his name.

I presume the prize is well earned since Phelps is a genius macroeconmist. I remember reading his book Structural Slumps: The Modern Equilibrium Theory of Unemployment, Interest, and Assets during my studies, I was amazed by the depth and completeness of his approach.

Saturday, October 07, 2006

Nobel Prize in Economics

On Monday (9 October) the winner of this year's Nobel Prize in Economics will be announced. Will it be an econometrician?

Three years ago, Engle and Granger were the last econometricians to receive the prize.

Some people say Eugene Fama could be a winner. His contributions to finance are essential to financial econometrics today.

Other put their money on Paul Krugman, who in my opinion is a clever man, but his contributions to economics are limited. Jagdish Bhagwati is certainly a better candidate.

It is well known that the AEA Clark Medal is a good indicator of future Nobel Prize winners. However the only econometrician on that list who is not too young (like Steven Levitt) is Jerry Hausman of MIT.

Who do you think will win?