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Fuzzy-persistent geometry for inflation vulnerability in MENA: A harmonised, structure-aware composite index with policy applications
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DOI：10.1016/j.fss.2026.110020.png)
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Abstract
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We introduce a fuzzy-persistent geometry framework for measuring inflation vulnerability through the joint evolution of relative price gaps and household exposure. The resulting monthly Inflation Vulnerability Index based on Fuzzy–Persistent Geometry (IVI–FPG) is designed to complement the consumer price index and distributional inflation measures by tracking not only the magnitude of item-level shocks, but also the way such shocks become structurally connected across consumption baskets when substitution is constrained. The construction combines a tri-logistic membership function, directed persistent homology, an axiomatic core based on scale invariance, monotonicity in directed gaps and subgroup consistency, and a semi-parametric bootstrap that links household budget surveys (HBS) with high-frequency price information. The framework is extended to a harmonised Middle East and North Africa setting covering Tunisia, Morocco, Algeria, Egypt and Jordan through a taxonomy-bridging matrix and decomposable regional aggregation. Over 2016–2024, IVI–FPG tends to anticipate turning points in headline consumer price inflation, with cereals and transport fuel dominating vulnerability episodes. Adding lagged IVI–FPG to simple autoregressive nowcasting models improves predictive performance, while counterfactual simulations indicate that targeted cereal support and moderated fuel passthrough can reduce vulnerability peaks at lower fiscal cost than blanket measures. Robustness checks confirm stability to membership steepness, distance metrics and aggregation weights, while preserving interpretable decompositions suitable for policy dashboards.
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