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Forecasting World Trade: Direct Versus “Bottom-Up” Approaches

  • Matthias Burgert
  • Stephane Dees

    ()

In a globalised world economy, global factors have become increasingly important to explain trade flows at the expense of country-specific 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-specific 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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File URL: http://hdl.handle.net/10.1007/s11079-007-9068-y
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Article provided by Springer in its journal Open Economies Review.

Volume (Year): 20 (2009)
Issue (Month): 3 (July)
Pages: 385-402

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Handle: RePEc:kap:openec:v:20:y:2009:i:3:p:385-402
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