The Study of the Development of Leading Inflation Indicators (Book II)

This study develops leading inflation indicators for early warnings of inflation surge, utilizing data and time series analysis based on the OECD framework for economic indicators. Among seven candidates, world crude oil and rice prices emerge as leading indicators, with Granger Causality tests confirming the significant influence of crude oil prices on inflation. This indicator form the leading inflation index, demonstrating a correlation between its cycle and actual inflation. Changes in the index precede subsequent inflation changes with nearly identical patterns. Additionally, the analysis indicates that fluctuations in crude oil prices tend to be followed by corresponding inflation changes a month later.