Forecasting world trade. Direct versus "bottom-up" approaches
AbstractIn a globalised world economy, global factors have become increasingly important to explain trade-flows at the expense of country-specifc determinants. This paper shows empirically the superiority of direct forecasting methods, in which world trade is directly forecasted at the aggregate levels, relative to "bottom-up" approaches, where world trade results from an aggregation of country-specifc forecasts. Factor models in particular prove rather accurate, where the factors summarise large-scale datasets relevant in the determination of trade-flows. JEL Classification: C53, C32, E37, F17.
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Bibliographic InfoPaper provided by European Central Bank in its series Working Paper Series with number 882.
Length: 38 pages
Date of creation: Mar 2008
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Other versions of this item:
- Matthias Burgert & Stephane Dees, 2009. "Forecasting World Trade: Direct Versus “Bottom-Up” Approaches," Open Economies Review, Springer, vol. 20(3), pages 385-402, July.
- C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
- C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models
- E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
- F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-05-05 (All new papers)
- NEP-CBA-2008-05-05 (Central Banking)
- NEP-FOR-2008-05-05 (Forecasting)
- NEP-INT-2008-05-05 (International Trade)
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