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Econometric Models or Smoothing Exponential Techniques to Predict Macroeconomic Indicators in Romania

Author

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  • Mihaela Bratu

    (Faculty of Cybernetics, Statistics and Economic Informatics, Bucharest, Romania)

Abstract

Inflation rate, unemployment rate and interest rate are some of the most important indicators used at macroeconomic level. These variables present an important interest for the central banks that establish the monetary policy (infl ation target), but also for the government interested in public policies. Macroeconometric modeling offers the advantage of using more models to describe the evolution of a single variable and also the advantage of predicting it. But it is important to choose the forecast with the higher degree of accuracy. Calculating some indicators of accuracy we may know the best forecast that will be used to establish the macroeconomic policies. For the interest rate and unemployment rate in Romania VAR(2) models generated more accurate forecasts than ARMA models or models with lags. For the infl ation rate the model with lag, which is consistent with Granger causality, determined the most accurate forecasts. The predictions based on all these models are better than those got using smoothing exponential techniques.

Suggested Citation

  • Mihaela Bratu, 2012. "Econometric Models or Smoothing Exponential Techniques to Predict Macroeconomic Indicators in Romania," Zagreb International Review of Economics and Business, Faculty of Economics and Business, University of Zagreb, vol. 15(2), pages 87-100, November.
    • Handle: RePEc:zag:zirebs:v:15:y:2012:i:2:p:87-100
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    Citations

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    Cited by:

    1. Shobande Olatunji Abdul & Shodipe Oladimeji Tomiwa, 2020. "Re-Evaluation of World Population Figures: Politics and Forecasting Mechanics," Economics and Business, Sciendo, vol. 34(1), pages 104-125, February.

    More about this item

    Keywords

    forecasts; accuracy; econometric models; smoothing exponential techniques;
    All these keywords.

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods

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