README.md

Inflation-Forecasting-using-SARIMAX-and-NKPC-Economic-Model

Objective of the Project:

1. Use SARIMAX Modelling to forecast monthly inflation rate in India using Bank rate as the exogenous variable
2. Estimate monthly inflation by economic modelling using the New Keynesian Phillips Curve

Compare which model is a better fit to actual data using Residual Mean Squared Error as the estimator. We have worked with Monthly Inflation Rate and Bank Rate data of India for 60 years spanning 1960-2020.

Please download the notebooks and the excel file attached in order to see the interactive plots.