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Modelling and Forecasting Recessions in Oil-exporting Countries: The Case of Iran

Author

Listed:
  • Shahram Fattahi

    (Razi University, Iran,)

  • Kiomars Sohaili

    (Razi University, Iran,)

  • Hamed Monkaresi

    (Razi University, Iran,)

  • Fatemeh Mehrabi

    (Razi University, Iran,)

Abstract

Business cycles show the ups and downs of the national production and can have a great impact on macroeconomic variables. That is why predicting business cycles in macroeconomic is of great importance. Since the main goal of economists is to provide the ground for economic stabilization and to prevent economic fluctuations and instabilities, knowing that the economy has entered a period of economic expansion or recession can be efficient in determining effective economic policies. In this research, using statistical data during 1974-2014 and decision making tree, we tried to forecast the next recessions in Iran. The results show that, among the indicators used, momentum imports, revenue from oil exports, unexpected momentum inflation (INF), real total import, and INF are more effective in recession forecast. Also, the results indicate that boosted regression trees can be a useful technique for analyzing economic policy.

Suggested Citation

  • Shahram Fattahi & Kiomars Sohaili & Hamed Monkaresi & Fatemeh Mehrabi, 2017. "Modelling and Forecasting Recessions in Oil-exporting Countries: The Case of Iran," International Journal of Economics and Financial Issues, Econjournals, vol. 7(3), pages 569-574.
    • Handle: RePEc:eco:journ1:2017-03-75
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    References listed on IDEAS

    as
    1. Buchen, Teresa & Wohlrabe, Klaus, 2011. "Forecasting with many predictors: Is boosting a viable alternative?," Economics Letters, Elsevier, vol. 113(1), pages 16-18, October.
    2. Travis J. Berge, 2015. "Predicting Recessions with Leading Indicators: Model Averaging and Selection over the Business Cycle," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 34(6), pages 455-471, September.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Modelling; Recessions; Oil-exporting; Iran;
    All these keywords.

    JEL classification:

    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection

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