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Forecasting GDP all over the world using leading indicators based on comprehensive survey data

Author

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  • Johanna Garnitz
  • Robert Lehmann
  • Klaus Wohlrabe

Abstract

Comprehensive and international comparable leading indicators across countries and continents are rare. In this paper, we use a free and instantaneous available source of leading indicators, the ifo World Economic Survey (WES), to forecast growth of Gross Domestic Product (GDP) in 44 countries and three country aggregates separately. We come up with three major results. First, for more than three-fourths of the countries or country-aggregates in our sample a model containing one of the major WES indicators produces on average lower forecast errors compared to a benchmark model. Second, the most important WES indicators are either the economic climate or the expectations on future economic development for the next six months. And third, adding the WES indicators of the main trading partners leads to a further increase of forecast accuracy in more than 50% of the countries. It seems therefore reasonable to incorporate economic signals from the domestic economy’s main trading partners.

Suggested Citation

  • Johanna Garnitz & Robert Lehmann & Klaus Wohlrabe, 2019. "Forecasting GDP all over the world using leading indicators based on comprehensive survey data," CESifo Working Paper Series 7691, CESifo.
  • Handle: RePEc:ces:ceswps:_7691
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    References listed on IDEAS

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    Cited by:

    1. Johanna Garnitz & Robert Lehmann & Klaus Wohlrabe, 2019. "Weltweite Prognosen des Bruttoinlandsprodukts mit Hilfe der Indikatoren des ifo World Economic Survey," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 72(15), pages 36-39, August.
    2. Dorine Boumans & Clemens Fuest & Carla Krolage & Klaus Wohlrabe, 2020. "Expected effects of the US tax reform on other countries: global and local survey evidence," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 27(6), pages 1608-1630, December.
    3. Abdullah Ghazo, 2021. "Applying the ARIMA Model to the Process of Forecasting GDP and CPI in the Jordanian Economy," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 12(3), pages 70-77, May.
    4. Claveria, Oscar & Monte, Enric & Torra, Salvador, 2020. "Economic forecasting with evolved confidence indicators," Economic Modelling, Elsevier, vol. 93(C), pages 576-585.

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    More about this item

    Keywords

    world economic survey; economic climate; forecasting GDP;
    All these keywords.

    JEL classification:

    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications

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