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Real-time Forecasts of Economic Activity for Latin American Economies

  • Philip Liu
  • Rafael Romeu
  • Troy Matheson

Macroeconomic policy decisions in real-time are based the assessment of current and future economic conditions. These assessments are made difficult by the presence of incomplete and noisy data. The problem is more acute for emerging market economies, where most economic data are released infrequently with a (sometimes substantial) lag. This paper evaluates "nowcasts" and forecasts of real GDP growth using five alternative models for ten Latin American countries. The results indicate that the flow of monthly data helps to improve forecast accuracy, and the dynamic factor model consistently produces more accurate nowcasts and forecasts relative to other model specifications, across most of the countries we consider.

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Paper provided by International Monetary Fund in its series IMF Working Papers with number 11/98.

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Length: 25
Date of creation: 01 Apr 2011
Date of revision:
Handle: RePEc:imf:imfwpa:11/98
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  1. Domenico Giannone & Lucrezia Reichlin & Luca Sala, 2005. "Monetary Policy in Real Time," NBER Chapters, in: NBER Macroeconomics Annual 2004, Volume 19, pages 161-224 National Bureau of Economic Research, Inc.
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