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Tracking the Ups and Downs in Indonesia’s Economic Activity During COVID-19 Using Mobility Index: Evidence from Provinces in Java and Bali

Author

Listed:
  • Yose Rizal Damuri

    (Centre for Strategic and International Studies (CSIS), Indonesia)

  • Prabaning Tyas

    (Tenggara Strategics, Indonesia)

  • Haryo Aswicahyono

    (Centre for Strategic and International Studies (CSIS), Indonesia)

  • Lionel Priyadi

    (Tenggara Strategics, Indonesia)

  • Stella Kusumawardhani

    (Tenggara Strategics, Indonesia)

  • Ega Kurnia Yazid

    (Centre for Strategic and International Studies (CSIS), Indonesia)

Abstract

A timely and reliable prediction of economic activities is crucial in policymaking, especially in the current COVID-19 pandemic situation, which requires real-time decisions. However, making frequent predictions is challenging due to the substantial delays in releasing aggregate economic data. This study aims to nowcast Indonesia’s economic activities during the COVID-19 pandemic using the novel high-frequency Facebook Mobility Index as a predictor. Employing mixed-frequency, mixed-data sampling, and benchmark least-squares models, we expanded the mobility index and used it to track the growth dynamics of the gross regional domestic product of provinces in Java and Bali and performed a bottom-up approach to estimate the aggregated economic growth of the provinces altogether. Our results suggested that the daily Facebook Mobility Index was a considerably reliable predictor for projecting economic activities on time. All models almost consistently produced reliable directional predictions. Notably, we found the mixed data sampling-autoregressive model to be slightly superior to the other models in terms of overall precision and directional predictive accuracy across observations.

Suggested Citation

  • Yose Rizal Damuri & Prabaning Tyas & Haryo Aswicahyono & Lionel Priyadi & Stella Kusumawardhani & Ega Kurnia Yazid, 2021. "Tracking the Ups and Downs in Indonesia’s Economic Activity During COVID-19 Using Mobility Index: Evidence from Provinces in Java and Bali," Working Papers DP-2021-18, Economic Research Institute for ASEAN and East Asia (ERIA).
    • Handle: RePEc:era:wpaper:dp-2021-18
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    References listed on IDEAS

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    More about this item

    Keywords

    COVID-19; nowcasting; GDP; mobility; Mixed-frequency;
    All these keywords.

    JEL classification:

    • C20 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - General
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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