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What Drives Inflation and How: Evidence from Additive Mixed Models Selected by cAIC

Philipp F. M. Baumann, Enzo Rossi, Alexander Volkmann

arXiv 11 Jun 2020 · Statistics — Applications · publishedFrontiers in Applied Mathematics and Statistics (2023) · 6 citations (OpenAlex)

arXiv:2006.06274 · PDF · DOI · OpenAlex · Extracted main text

Abstract

We analyze the forces that explain inflation using a panel of 122 countries from 1997 to 2015 with 37 regressors. 98 models motivated by economic theory are compared to a gradient boosting algorithm, non-linearities and structural breaks are considered. We show that the typical estimation methods are likely to lead to fallacious policy conclusions which motivates the use of a new approach that we propose in this paper. The boosting algorithm outperforms theory-based models. We confirm that energy prices are important but what really matters for inflation is their non-linear interplay with energy rents. Demographic developments also make a difference. Globalization and technology, public debt, central bank independence and political characteristics are less relevant. GDP per capita is more relevant than the output gap, credit growth more than M2 growth.

Citation extraction

53
references
83
in-text mentions
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distinct cited
2
self-citations
8,561
main-text words

appendix boundary found by appendix_command · 58% of the source is main text. Read the extracted text to check this.

Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Mundlak, Y. (1978) On the pooling of time series and cross section d… Econometrica, 46, 69–850.81142100%
2Bühlmann, P., Hothorn, T. et al. (2007) Boosting algorithms: Regular… Statistical science, 22, 477–5050.5112250%
3Hothorn, T., Buehlmann, P., Kneib, T., Schmid, M. and Hofner, B. (20… (2018) https://CRAN.R-project.org/package=mboost0.5112250%
4Wood, S. N. (2011) Fast stable restricted maximum likelihood and mar… Journal of the Royal Statistical Society (B), 73, 3–360.5112250%
5Wood, S. and Scheipl, F. (2017) gamm4: Generalized Additive Mixed Mo… https://CRAN.R-project.org/package=gamm40.5112250%
6Wood, S. N. (2011) Fast stable restricted maximum likelihood and mar… (2013) Biometrika, 100, 221–2280.51121100%
7Hofner, B., Mayr, A., Robinzonov, N. and Schmid, M. (2014) Model-bas… Computational Statistics, 29, 3–350.51121100%
8Honaker, J., King, G. and Blackwell, M. (2011) Amelia II: A program… Journal of Statistical Software, 45, 1–470.40511100%
9Baumann, P. F. M., Schomaker, M. and Rossi, E. (2021b) Estimating th… Journal of Causal Inference, 9, 109–146 self0.40511100%
10Baumann, P. F. M., Rossi, E. and Volkmann, A. (2021a) What drives in… Swiss National Bank Working Paper Series, 12 self0.40511100%

Showing the top 10 of 53 scored citations.

Cited by, within the corpus

arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.

Citing paperIntensityMentionsSections
1Estimating the Effect of Central Bank Independence on Inflation Using Longitudinal Targeted Maximum Likelihood Estimation0.64422