Forecasting inflation under uncertainty: The forgotten dog and the frisbee

Arrow, 1954, “Existence of an equilibrium for a competitive economy, Econometrica, 22, 265, 10.2307/1907353 Bache, 2006 Bhattacharya, 2008, Exchange rate pass-through and relative prices: An industry-level empirical investigation, J. Int. Money Finance, 27, 1135, 10.1016/j.jimonfin.2008.05.004 Bhattacharya, 2008, Forecasting industry-level CPI and PPI inflation: Does exchange rate pass-through matter?, Int. J. Forecast., 24, 134, 10.1016/j.ijforecast.2007.06.002 Bhattarai, 2011, Impact of exchange rate and money supply on growth, inflation and interest rates in the UK, Int. J. Monetary Econ. Finance, 4, 355, 10.1504/IJMEF.2011.043400 Box, 1976 Broadbent, 2017 Burgess, 2013, The bank of England's forecasting platform: compass, maps, ease and the suite of models Burstein, 2014, International prices and exchange rates, Handbook Int. Econ., 4, 391, 10.1016/B978-0-444-54314-1.00007-0 Bussière, 2015, Do real exchange rate appreciations matter for growth?, Economic Policy, 30, 5, 10.1093/epolic/eiu005 Campa, 2005, Exchange rate pass-through into import prices, Rev. Econ. Stat., 87, 679, 10.1162/003465305775098189 Camerer, 2003 Carney, M (2017), Lambda, London School of Economics, available at http://www.bankofengland.co.uk/publications/Documents/speeches/2017/speech954.pdf. Ca' Zorzi, 2018, Exchange rate forecasting on a napkin Choudhri, 2006, Exchange rate pass-through to domestic prices: does the inflationary environment matter?, J. Int. Money Finance, 25, 614, 10.1016/j.jimonfin.2005.11.009 DeMiguel, 2007, “Optimal versus naive diversification: how inefficient is the 1/n porfolio strategy, Rev Finance. Stud., 22, 1915, 10.1093/rfs/hhm075 Domit, 2016, A Bayesian VAR benchmark for compass Fawcett, 2015, Evaluating UK point and density forecasts from an estimated DSGE model: the role of off-model information over the financial crisis, Bank of England Fisher, 2015, “US inflation developments Fleer, 2015 Forbes, 2014, The economic impact of sterling's recent moves: more than a midsummer night's dream Forbes, 2015, “Risks around the Forecast Forbes, K. (2015b). “When, why, and what's next for low inflation?: No magic slippers needed”, London School of Economics on June 2015. Forbes, 2015, “The Shocks Matter: New Evidence on Exchange Rate Pass-Through, External MPC Unit Forbes, 2016, Much Ado about Something Important: How do Exchange Rate Movements Affect Inflation?, The Manchester School, 84, 15, 10.1111/manc.12159 Friedman, 1960 Frydman, 2011 Gigerenzer, 2005, Fast and frugal heuristics in medical decision making, 3 Gigerenzer, 2007 Gigerenzer, 2009, Homo heuristicus: why biased minds make better inferences, Topics Cognit. Sci., 1, 107, 10.1111/j.1756-8765.2008.01006.x Gigerenzer, 2010, “Moral satisficing: Rethinking Moral Behavior as Bounded Rationality, Topics Cognit. Sci., 2, 528, 10.1111/j.1756-8765.2010.01094.x Gigerenzer, 2017, A simple heuristic successfully used by humans animals, and machines: the story of the raf and luftwaffe, hawks and ducks, dogs and frisbees, baseball outfielders and sidewinder missiles_oh my, Topics Cognit. Sci., 9, 260, 10.1111/tops.12269 Gilchrist, 2015, Customer Markets and Financial Frictions: Implications for Inflation Dynamics Goldberg, 1997, Goods prices and exchange rates: what have we learned?, J. Econ. Lit., 35, 1243 Gopinath, 2015, The international price system Gürkaynak, 2013, Do DSGE models forecast more accurately out-of-sample than var models?, Centrer Econ. Policy Haldane, 2012, The dog and the Frisbee, “The Changing Policy Landscape” Haldane, 2017, [ Hänninen, 1999, Long-run price effects of exchange rate changes in Finnish pulp and paper exports, Appl. Econ., 31, 947, 10.1080/000368499323661 Hansen, 2010, “Fragile beliefs and the price of uncertainty, Quant. Econ., 129 Harford, 2011 Harvey, 2001 Hayek, 1974 2016 Jawadi, 2012, Introduction to Time-Varying Modelling with Macroeconomic and Financial Data, Macroecon. Dyn., 16, 167, 10.1017/S136510051100071X Jeffreys, 1961 Kahneman, 1974, Judgement under Uncertainty: Heuristics and Biases, Science, 4157, 1124 Kirby, 2014, Exchange Rate PassThrough: A View from a Global Structural Model, National Institute Economic Review, 230, F59, 10.1177/002795011423000115 Kirman, 2010 Knight, 1921 Markowitz, 1952, Portfolio Selection, J. Finance, 7, 77 Marazzi, 2005, Exchange rate pass-through to U.S. import prices: some new evidence Masch, 2015, Shifting “the dodo paradigm”: to be or not to be, World J. Social Sci., 5, 123 McCammon, 2007, “Comparing avalanche decision frameworks using accident data from the United States, Cold Reg. Sci. Technol., 193, 10.1016/j.coldregions.2006.08.007 Menon, 1995, Exchange rate pass-through, J. Econ. Surveys, 9, 197, 10.1111/j.1467-6419.1995.tb00114.x Merton, 1969, “Lifetime Portfolio Selection under Uncertainty: The Continuous-Time Case, Rev. Econ. Stat., 51, 247, 10.2307/1926560 Mishkin, 2008, Exchange rate pass-through and monetary policy Morris, 2008, Financial Regulation in a System Context, Brookings Papers Econ. Act., 229 Mumtaz, 2006, Exchange rate pass-through into UK import prices, Bank of England Quarterly Bulletin, Winter, 46 Nasir, 2018, "Brexit associated sharp depreciation and implications for UK's inflation and balance of payments, J. Econ. Stud., 45, 231, 10.1108/JES-02-2017-0051 Nasir, 2018, "Pre-Brexit: The EU referendum as an illustration of the effects of uncertainty on the Sterling exchange rate, J. Econ. Studies, 45, 910, 10.1108/JES-07-2017-0205 Nasir, 2020, A quarter century of inflation targeting & structural change in exchange rate pass-through: evidence from the first three movers, Struct. Change Econ. Dyn., 54, 42, 10.1016/j.strueco.2020.03.010 Nasir, 2020, Anchoring inflation expectations in the face of oil shocks & in the proximity of ZLB: A tale of two targeters, Energy Econ., 86, 10.1016/j.eneco.2020.104662 Nasir, 2020, Exchange rate pass-through & management of inflation expectations in a small open inflation targeting economy, Int. Rev. Econ. Finance, 10.1016/j.iref.2020.04.010 2017 2016 Russell, 1950 Selten, 2001, What is bounded rationality?, 13 Shambaugh, 2008, A new look at pass-through, Journal of International Money and Finance, 27, 560, 10.1016/j.jimonfin.2008.01.009 Simon, 1956, Rational choice and the structure of the environment, Psychological Review, 63, 10.1037/h0042769 Simon, 1972 Skidelsky, 2017 Snook, 2005, On the complexity and accuracy of geographic profiling strategies, J. Quant. Criminol., 21, 1, 10.1007/s10940-004-1785-4 Stulz, J. (2007). “Exchange rate pass-through in Switzerland: Evidence from vector autoregressions”, Swiss National Bank Economic Studies, No. 4. Taleb, 2007 Taleb, N.N. (2017), On Interventionistas and their Mental Defects, available athttps://medium.com/incerto/on-neo-cons-and-their-mental-defects-d12685585b11. von Neumann, 1944 Wimanda, 2011, Expectations and the inertia of inflation: the case of Indonesia, J. Policy Modeling, 33, 426, 10.1016/j.jpolmod.2010.08.009 Wübben, 2008, Instant customer base analysis: managerial heuristics often “get it right”, J. Market., 72, 82, 10.1509/jmkg.72.3.082 Yildirim, 2016, Exchange rate fluctuations and macroeconomic performance, J. Econ. Stud., 43, 678, 10.1108/JES-01-2015-0010 Zellner, 2007, Philosophy and objective of econometrics, J. Econometrics, 137, 331, 10.1016/j.jeconom.2005.11.001