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Forecasting consumer price index in Norway: An application of Box-Jenkins ARIMA models

NYONI, THABANI (2019): Forecasting consumer price index in Norway: An application of Box-Jenkins ARIMA models.

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Abstract

This research uses annual time series data on CPI in Norway from 1960 to 2017, to model and forecast CPI using the Box – Jenkins ARIMA technique. Diagnostic tests indicate that the N series is I (2). The study presents the ARIMA (2, 2, 2) model for predicting CPI in Norway. The diagnostic tests further imply that the presented optimal model is actually stable. The results of the study apparently show that CPI in Norway is likely to continue on an upwards trajectory in the next decade. The study basically encourages policy makers to make use of tight monetary and fiscal policy measures in order to control inflation in Norway.

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