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Journal of Applied Mathematics and Computation

ISSN Print: 2576-0645 Downloads: 154640 Total View: 1845455
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Article Open Access http://dx.doi.org/10.26855/jamc.2022.03.003

Directional Accuracy of MMS Survey of Inflation-Output Forecasts of G7 Countries: A ROC Analysis

Yasemin Ulu

Department of Economics, Saginaw Valley State University, University Center, Michigan, USA.

*Corresponding author: Yasemin Ulu

Published: January 10,2022

Abstract

We study the directional forecast accuracy of inflation and output forecasts from Money Market Services Survey (MMS) for G7 countries using a Receiver Operating Characteristic (ROC) curve analysis. Applying ROC curve technique is interesting since ROC analysis can capture the accuracy of directional forecasts for different criterion while the conventional market timing tests can be used only for one. Our results indicate that forecasts of inflation and output from MMS survey contain valuable information for the target variables considered uniformly for all countries. Our findings reinforce the results found in the literature that MMS survey of inflation output forecasts for G7 countries have directional forecast accuracy considered separately, although they seem to fail rationality tests under symmetric loss for some G7 countries. We conclude in favor of directional accuracy of inflation and output forecasts of MMS survey for G7 countries for the period considered.

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How to cite this paper

Directional Accuracy of MMS Survey of Inflation-Output Forecasts of G7 Countries: A ROC Analysis

How to cite this paper: Yasemin Ulu. (2022) Directional Accuracy of MMS Survey of Inflation-Output Forecasts of G7 Countries: A ROC Analysis. Journal of Applied Mathematics and Computation6(1), 13-18.

DOI: http://dx.doi.org/10.26855/jamc.2022.03.003