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Artificial neural network regression models: Predicting GDP growth

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  • Jahn, Malte

Abstract

Artificial neural networks have become increasingly popular for statistical model fitting over the last years, mainly due to increasing computational power. In this paper, an introduction to the use of artificial neural network (ANN) regression models is given. The problem of predicting the GDP growth rate of 15 industrialized economies in the time period 1996-2016 serves as an example. It is shown that the ANN model is able to yield much more accurate predictions of GDP growth rates than a corresponding linear model. In particular, ANN models capture time trends very flexibly. This is relevant for forecasting, as demonstrated by out-of-sample predictions for 2017.

Suggested Citation

  • Jahn, Malte, 2018. "Artificial neural network regression models: Predicting GDP growth," HWWI Research Papers 185, Hamburg Institute of International Economics (HWWI).
    • Handle: RePEc:zbw:hwwirp:185
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    References listed on IDEAS

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    1. Feng, Lihua & Zhang, Jianzhen, 2014. "Application of artificial neural networks in tendency forecasting of economic growth," Economic Modelling, Elsevier, vol. 40(C), pages 76-80.
    2. Kock, Anders Bredahl & Teräsvirta, Timo, 2014. "Forecasting performances of three automated modelling techniques during the economic crisis 2007–2009," International Journal of Forecasting, Elsevier, vol. 30(3), pages 616-631.
    3. Tkacz, Greg, 2001. "Neural network forecasting of Canadian GDP growth," International Journal of Forecasting, Elsevier, vol. 17(1), pages 57-69.
    4. Qi, Min, 2001. "Predicting US recessions with leading indicators via neural network models," International Journal of Forecasting, Elsevier, vol. 17(3), pages 383-401.
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    Cited by:

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    4. Julian Schiele & Thomas Koperna & Jens O. Brunner, 2021. "Predicting intensive care unit bed occupancy for integrated operating room scheduling via neural networks," Naval Research Logistics (NRL), John Wiley & Sons, vol. 68(1), pages 65-88, February.

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    More about this item

    Keywords

    neural network; forecasting; panel data;
    All these keywords.

    JEL classification:

    • C45 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Neural Networks and Related Topics
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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