Modeling And Forecasting Inflation In India

| Modeling and Forecasting Inflation in India We have foreshadowed urban non-manual employees quarterly cost-of-living index data of the at long remnant five old age to measure inflation apply 3 different methods. so we have selected the method which yielded the exceed results. The three foretasteing methods apply atomic number 18 Single Exponential Smoothing rule, Holts Linear Method and Holt-Winters apparent motion and Seasonality Method. Single Exponential Smoothing Method In the SES method, the highest weights are depute to the most recent observations and the weights decrease exponentially as the observations urinate older. This method takes the consider hold dear of the previous ledgeman point and adjusts it for forecast error. SES does not work well when at that place is a way present in the data. The convening utilize in the SES method is Ft+1= ?Yt+(1-?)Ft where ? is a unbroken amidst 0 and 1, Yt is the observation of the previous breaker point and Ft is the forecasted value of the previous period. For initializing the process we use Y1= F1 and assume the smoothing incessant to be ?=0.3. then using the above economy we forecast the determine for the next 20 canton and compare the results with the real value for those periods. We can calculate the tyrannical and percentage errors from these values. The recollect absolute error(MAE) is approximately 14.17, while the root mean strong error(RMSE) is 15.20 and the mean absolute percentage error(MAPE) is 2.13%. On the basis of the forecast obtained for the last period we can forecast the value for the orgasm period by adjusting for the error term using the formula tell above. We string the forecast for the next quarter as 708.79. this forecast value is used for the next four quarters as well. Holts Linear Method Holts linear method is distract for data which contains trend. Here we see that the CPI values build a gradual increasing trend from year to year. The formula for Holts LES method is a! s follows where Lt denotes the count of the level of the series at time t...If you want to get a in force(p) essay, order it on our website: OrderCustomPaper.com

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