Development of an Algorithm for Forecasting Inflation in the Economy Using Regression Models

10th International Scientific Conference Technics, Informatics and Education – TIE 2024, str. 97-103

АУТОР(И) / AUTHOR(S): Nemanja Jovanović

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DOI: 10.46793/TIE24.097J

САЖЕТАК /ABSTRACT:

This paper investigates the development of an efficient algorithm for forecasting inflation, using regression models with key macroeconomic parameters as input variables. The reason for this research is based on the increasingly rapid changes in financial indicators, which are conditioned both by the corona virus epidemic and by the ubiquitous economic sanctions caused by military conflicts. By analyzing the impact of the unemployment rate, GDP, interest rates on loans, then crude oil prices and the exchange rate on inflation, we can identify the optimal approach for forecasting inflationary trends. Experimental testing of various regression models allows for a deeper understanding of the factors that shape inflation, providing a basis for making better economic decisions. Moreover, the proposed methodology is adaptable and can be applied to other economies, broadening the scope and impact of the research. Through iterative testing of regression models, we obtain a model that has the highest precision, thus creating the possibility of maintaining stability and balance on the financial market.

КЉУЧНЕ РЕЧИ / KEYWORDS: 

algorithm; inflation; regression; macroeconomy; forecasting

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