Using the Box & Jenkins methodology to prevent Brazilian inflation

Abstract

This article aims to present the future behavior of the National Extended Consumer Price Index (IPCA) series, an official inflation measure, for the period from July 2019 to June 2020. An economy forecast is important to assist as monetary authorities define policy instruments, which have no Brazilian case or the Central Bank uses an inflation targeting system; and also to guide investments in the financial market. For this, use the Box-Jenkins methodology with the aid of the Gretl software. It is worth mentioning that the work made use of the X-12 ARIMA method to mitigate the seasonality of the series in question. A more adequate model was used in the analysis of graphs and in the statistical tests unique to the methodology, or which was defined in ARMA (1, 12).