Browsing by Author "Cherinet, Taddele"

Now showing 1 - 1 of 1
  • No Thumbnail Available
    Item
    Forecasting Model of Inflationary Process in Ethiopia
    (2008-07) Cherinet, Taddele; Olubusoye, Elisa (PhD)
    The primary focus of monetary policy both in Ethiopia and elsewhere, has traditionally been the maintenance of a low and stable rate of aggregate price inflation as defined by commonly accepted measures such as the consumer price index. The control of inflation is one of the problems facing a government wishing to encourage rapid economic development. The aim of this study is to investigate the nature of inflation in Ethiopia and construct a model that can be used to forecast future values. The exponential smoothing method was employed and the forecasting performance of winter (additive) method was found to be better. Two alternative approaches to model identification were considered, the Box-Jenkins methodology and penalty jimction criteria. For Ethiopian monthly inflation data covering the period 1997:08 to 2006:06 various possible ARMA models were fitted. The comparative performance of these ARMA models were checked and verified by using Akaike In/ormation Criteria, Schwartz Criteria, Root mean square percentage error, Mean absolute error and Mean absolute percentage error.