Forecasting the Great Trade Collapse

Hakan Yilmazkuday

No 1603, Working Papers from Florida International University, Department of Economics

Abstract: This paper introduces a simple methodology to forecast international trade. The main innovation is to calculate non-unitary expenditure elasticities of import demand implied by non-homothetic preferences in the previous year to be further combined with the current change in expenditure to forecast the current imports. Using U.S. data on aggregate expenditure and good-level imports, we test the performance of the methodology in forecasting international imports. The methodology is successful in forecasting not only the Great Trade Collapse and the corresponding recovery period but also the other periods in the sample.

Keywords: Great Trade Collapse; Non-Homothetic Preferences; Forecasting (search for similar items in EconPapers)
JEL-codes: F14 F17 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2016-06
New Economics Papers: this item is included in nep-for and nep-int
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https://economics.fiu.edu/research/pdfs/2016_working_papers/1603.pdf First version, 2016 (application/pdf)

Related works:
Journal Article: Forecasting the Great Trade Collapse (2016)
Journal Article: Forecasting the Great Trade Collapse (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:fiu:wpaper:1603

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