Dallas Fed: Inflation harder to predict - Nashville Business Journal:

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Researchers Mark Wynne and Patrick Roy comparerd annual economic forecasts going back to 1991with year-over-yeard changes in the U.S. Consumer Price Index. Thei r goal was to determine whetherglobalization -- the increasing integrationj of international economies through trade and financial flows -- has made it hardetr to predict when inflation will ( ). Wynne told the in an interview Wednesday that the study foundx that inflation in the United States has been more difficul to forecast in the 2000se when compared tothe 1990s. However, the opposite was founxd to be true in almost every othert country analyzed inthe study. Dr.
Ravi professor of economics at , says measuringb inflation based on domestic demand is not as importanyt as it once wasin America, due to globalization and foreign competition. He said in the past, when a lot of moneyu was printed, prices went up and the high monety supply would cause a higher ConsumerPricre Index, a measure of inflation. Accuratew inflation forecasts are more difficult now due to globalprice competition, he CPI-type inflation has not flareed up, even with new money being printed in the because competition from countries such as China and Japan is keeping prices However, he said inflation was stronv in other areas, including the oil Going forward, he thinks other factors will be more accurate inflatioj indicators.
“I think inflation will depend more on oil prices and the valu of the dollar than onmoney supply," Batraa said. “The Federal Reserve has printed a lot of If the dollar remains stable andoil doesn’yt heat up, inflation will be contained. But if the dollae falls sharply and oilheatas up, we will have he said.