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Short-Term GDP Forecasting Using Bridge Models: a Case for Chile

Author

Listed:
  • Marcus Cobb
  • Gonzalo Echavarría
  • Pablo Filippi
  • Macarena García
  • Carolina Godoy
  • Wildo González
  • Carlos Medel
  • Marcela Urrutia

Abstract

The aim of this document is to provide a forecasting tool that facilitates understanding economic developments in a timely manner. This is pursued through the Bridge Model approach by using it to relate a large set of monthly indicators to Chilean GDP and its main components. The outcome is a set of simple equations that characterize reasonably well total GDP and the feasible supply- and demand-side components based on a small set of relevant indicators. The selected equations generally provide better short-term forecasts than simple autoregressive models. However, if needed, the equation selection methodology is straightforward enough to update the equations easily making it an attractive tool for real-time forecasting.

Suggested Citation

  • Marcus Cobb & Gonzalo Echavarría & Pablo Filippi & Macarena García & Carolina Godoy & Wildo González & Carlos Medel & Marcela Urrutia, 2011. "Short-Term GDP Forecasting Using Bridge Models: a Case for Chile," Working Papers Central Bank of Chile 626, Central Bank of Chile.
    • Handle: RePEc:chb:bcchwp:626
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    File URL: https://www.bcentral.cl/documents/33528/133326/DTBC_626.pdf
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    Cited by:

    1. Nicolás Chanut & Mario Marcel C. & Carlos A. Medel V., 2019. "Can economic perception surveys improve macroeconomic forecasting in Chile?," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 22(3), pages 034-097, December.
    2. Víctor Riquelme & Gabriela Riveros, 2018. "Un Indicador Contemporáneo de Actividad (ICA) para Chile," Notas de Investigación Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 21(1), pages 134-149, April.
    3. Abdić Ademir & Resić Emina & Abdić Adem & Rovčanin Adnan, 2020. "Nowcasting GDP of Bosnia and Herzegovina: A Comparison of Forecast Accuracy Models," South East European Journal of Economics and Business, Sciendo, vol. 15(2), pages 1-14, December.

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