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Nowcasting Bosnia and Herzegovina GDP in Real Time

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  • Antonio Musa

    (Central Bank of Bosnia and Herzegovina)

Abstract

The aim of this paper is to evaluate current quarterly nowcasts of the gross domestic product in Bosnia and Herzegovina based on the flow of available monthly economic indicators that are available during the same quarter. The nowcasting performance indicates that it is worthwhile to include a broad group of forecasting models based on the different methodologies. In addition to the models, the choice of the variables and measurement of the loss function in evaluating nowcasting performance are the core of nowcasting. In a time marked by pandemic of corona virus and war in Ukraine, nowcasting models have more profound role than more structural models. The high variance of the specific nowcasting model influences the use of the results of combinations of many models. Using a comprehensive method for preselection of variables and by using the other combination methods, the forecasting errors are lower, even in times of high uncertainty.

Suggested Citation

  • Antonio Musa, 2022. "Nowcasting Bosnia and Herzegovina GDP in Real Time," IHEID Working Papers 08-2022, Economics Section, The Graduate Institute of International Studies.
    • Handle: RePEc:gii:giihei:heidwp08-2022
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    File URL: http://repec.graduateinstitute.ch/pdfs/Working_papers/HEIDWP08-2022.pdf
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    References listed on IDEAS

    as
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    6. Baffigi, Alberto & Golinelli, Roberto & Parigi, Giuseppe, 2004. "Bridge models to forecast the euro area GDP," International Journal of Forecasting, Elsevier, vol. 20(3), pages 447-460.
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    More about this item

    Keywords

    Nowcasting; short-term forecasting; uncertainty; pandemic;
    All these keywords.

    JEL classification:

    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
    • E66 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General Outlook and Conditions
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • C55 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Large Data Sets: Modeling and Analysis
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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