Modeling And Forecasting Inflation In India

| Modeling and Forecasting Inflation in India We have foreshadowed urban non-manual employees quarterly consumer price index data of the at long belong five old age to measure inflation exploitation 3 different methods. so we have selected the method which yielded the scoop up results. The three work outing methods apply atomic number 18 Single Exponential Smoothing rule, Holts Linear Method and Holt-Winters purport and Seasonality Method. Single Exponential Smoothing Method In the SES method, the highest weights are appoint to the most recent observations and the weights decrease exponentially as the observations let down older. This method takes the foreshadow hold dear of the previous breakers point and adjusts it for forecast error. SES does not work well when there is a disposition present in the data. The convening utilize in the SES method is Ft+1= ?Yt+(1-?)Ft where ? is a invariable amidst 0 and 1, Yt is the observation of the previous br eaker point and Ft is the forecasted value of the previous period. For initializing the process we use Y1= F1 and assume the smoothing incessant to be ?=0.3. then using the above blueprint we forecast the determine for the next 20 quarters and compare the results with the real value for those periods. We can calculate the tyrannical and percentage errors from these values. The concoct absolute error(MAE) is approximately 14.

17, while the root mean agora error(RMSE) is 15.20 and the mean absolute percentage error(MAPE) is 2.13%. On the basis of the forecast obtained for the last period we can forecast the value for the attack period by adjusting f! or the error term using the formula tell above. We derive the forecast for the next quarter as 708.79. this forecast value is used for the next four quarters as well. Holts Linear Method Holts one-dimensional method is distract for data which contains trend. Here we see that the CPI values build a gradual increasing trend from year to year. The formula for Holts LES method is as follows where Lt denotes the omen of the level of the series at time t...If you want to get a in force(p) essay, order it on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper