Institute of Economic Sciences
Wroclaw University
Wroclaw, 12.02.2001
Inflation in Poland
The real values of inflation in 1990s:
| Year(t) | 1991 | 1992 | 1993 | 1994 | 1995 | 1996 | 1997 | 1998 | 1999 | 2000 |
| Inflation (%) | 70.3 | 43.0 | 35.3 | 32.2 | 27.8 | 19.9 | 14.9 | 11.8 | 7.3 | 10.1 |
The applied model is very simple, namely:
Identification of both parameters using real data from the period (1991, 2000) gives the following values of the parameters:
a= 61.55, b= -0,23
On the basis of these values the forecasted inflation in Poland is:
| Year | 1991 | 1992 | 1993 | 1994 | 1995 | 1996 | 1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2010 |
| Real inflation | 70.30 | 43.00 | 35.30 | 32.20 | 27.80 | 19.90 | 14.90 | 11.80 | 7.30 | 10.10 | |||||||||
| Forecast | 61.55 | 48.89 | 38.83 | 30.85 | 24.50 | 19.46 | 15.46 | 12.28 | 9.75 | 7.75 | 6.15 | 4.89 | 3.88 | 3.08 | 2.44 | 1.95 | 1.55 | 1.23 | 0.77 |
The figure below visualises the quality of identification and forecast (+ are real values and the red line is the identified curve of inflation).
Retroprognosis:
Retroprognosis gives a hint on the quality of identification. Let's assume that for identification of the parameters we use the shorter period in the past (e.g., 1991-1996) and next we use the rest of the period (namely 1997-2000) to compare the forecast values to the real values.
On the basis of real data from the period (1991, 1996):
| Year | 1991 | 1992 | 1993 | 1994 | 1995 | 1996 | 1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2010 |
| Real inflation | 70.30 | 43.00 | 35.30 | 32.20 | 27.80 | 19.90 | 14.90 | 11.80 | 7.30 | 10.10 | |||||||||
| Forecast | 61.05 | 48.98 | 39.29 | 31.52 | 25.29 | 20.29 | 16.28 | 13.06 | 10.48 | 8.40 | 6.74 | 5.41 | 4.34 | 3.48 | 2.79 | 2.24 | 1.80 | 1.44 | 0.93 |
In the figure below:
+ - real values used for identification
* - real values not used for identification and used for comparison to the model values
red line - the model values
Prognosis based on real values from the most recent period (1995, 2000)
| Year | 1995 | 1996 | 1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2010 |
| Real inflation | 27.80 | 19.90 | 14.90 | 11.80 | 7.30 | 10.10 | |||||||||
| Forecast | 25.13 | 19.82 | 15.63 | 12.33 | 9.73 | 7.67 | 6.05 | 4.77 | 3.77 | 2.97 | 2.34 | 1.85 | 1.46 | 1.15 | 0.72 |
