Student Stories: Forecasting Inflation for the UAE

Fernando Mundaca is currently pursuing a master's degree in the MPA/ID program at Harvard Kennedy School (expected graduation in May 2023). He was accepted into the Growth Lab's 2022 Summer Internship Program and contributed to the UAE project. Our team is developing rigorous research to inform the Ministry of Economy in devising a dynamic trade policy, geared towards promoting structural transformation in the UAE and achieving sustained long-term economic growth.

Why did you apply to be a Growth Lab intern?
I found the project on diversification of the UAE's economy very interesting. I wanted to work in a country set-up that was completely different to what I was used to (South American government).

What did you work on this summer?
I worked on a model to forecast/nowcast inflation in the UAE. Because of the international context, high inflation in the country was a concern for the Ministry of Economy. I divided the CPI into four components and worked a model for each component. 

In what ways were you challenged?
Working in a new country for a new institution, locating and accessing information was a challenge. The ministry is a large and complex organization that I had to quickly learn how to navigate if the project was to be successful.

What was your most exciting experience?
Getting to know a different government type (monarchy) and monetary policy (exchange rate pegged to the dollar) were the most exciting aspects of doing the internship.

What advice would you give future Growth Lab interns?
I would advise them to have patience even if the internship seems short. There is enough time to do something productive and interesting.

What’s next for you?
After the program, I am going back to the Central Reserve Bank of Peru to try to apply some of the tools learned at HKS.