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Forecasting Industry Employment for a Resource-Based Economy Using Bayesian Vector Autoregressive Models

Author

Listed:
  • Seung, Chang K.

    (AK Fisheries Science Center, National Marine Fisheries Service, Seattle, WA)

  • Ahn, Sung K.

    (WA State U)

Abstract

Bayesian vector autoregressive (BVAR) models are developed to forecast industry employment for a resource-based economy. Two different types of input-output (I-O) information are used as priors: (i) a reduced-form I-O relationship and (ii) an economic-base version of the I-O information. Out-of-sample forecasts from these two I-O-based BVAR models are compared with forecasts from an autoregressive model, an unconstrained VAR model, and a BVAR model with a Minnesota prior. Results indicate most importantly that overall the model version with economic base information performs the best in the long run.

Suggested Citation

  • Seung, Chang K. & Ahn, Sung K., 2010. "Forecasting Industry Employment for a Resource-Based Economy Using Bayesian Vector Autoregressive Models," The Review of Regional Studies, Southern Regional Science Association, vol. 40(2), pages 181-196.
  • Handle: RePEc:rre:publsh:v:40:y:2010:i:2:p:181-96
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    References listed on IDEAS

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    3. Dan S. Rickman, 2001. "Using Input-Output Information for Bayesian Forecasting of Industry Employment in a Regional Econometric Model," International Regional Science Review, , vol. 24(2), pages 226-244, April.
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    More about this item

    Keywords

    Forecast; Forecasting; Input Output;

    JEL classification:

    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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