Research Discussion Paper – RDP 2010-03 Modelling Inflation in Australia

Contents

• Introduction
• Modelling Structure and Theory
• Estimation
• Results
• Investigating the Role of Other Variables or Restrictions
• Changes in the Inflation Process over Time
• Conclusions
• Appendix A: Derivation of the Mark-up Model of Inflation
• Appendix B: Additional Regression Results
• References

We would like to thank Dougal Crawford for his contribution to the early stages of this work, Adam Cagliarini, Adrian Pagan and Tim Robinson for their advice, and David Jennings for his assistance with forecast comparisons. We also thank Jacqui Dwyer, Alex Heath, Jarkko Jääskelä, Mariano Kulish, John Simon and Anders Vredin for their comments. Responsibility for any remaining errors rests with us. The views expressed in this paper are those of the authors and are not necessarily those of the Reserve Bank of Australia.