Direct vs bottom-up approach when forecasting GDP: reconciling literature results with institutional practice

Paulo Esteves

Working Papers from Banco de Portugal, Economics and Research Department

Abstract: How should we forecast GDP? Should we forecast directly the overall GDP or aggregate the forecasts for each of its components using some level of disaggregation? The search for the answer continues to motivate several horse races between these two approaches. Nevertheless, independently of the results, institutions producing shortterm forecasts usually opt for a bottom-up approach. This paper uses an application for the euro area to show that the option between direct and bottom-up approaches as the level of disaggregation chosen by forecasters is not determined by the results of those races.

JEL-codes: C32 C53 E27 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-cba and nep-for
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Direct vs bottom–up approach when forecasting GDP: Reconciling literature results with institutional practice (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ptu:wpaper:w201129

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