Short-Term GDP Forecasting Using Bridge Models: a Case for Chile

Marcus P.A. Cobb, Gonzalo Echavarría, Pablo Filippi, Macarena García, Carolina Godoy, Wildo Gonzalez P. (), Carlos A. Medel Vera () and Marcela Paula Urrutia

Working Papers Central Bank of Chile from Central Bank of Chile

Abstract: The aim of this document is to provide a forecasting tool that facilitates understanding economic developments in a timely manner. This is pursued through the Bridge Model approach by using it to relate a large set of monthly indicators to Chilean GDP and its main components. The outcome is a set of simple equations that characterize reasonably well total GDP and the feasible supply- and demand-side components based on a small set of relevant indicators. The selected equations generally provide better short-term forecasts than simple autoregressive models. However, if needed, the equation selection methodology is straightforward enough to update the equations easily making it an attractive tool for real-time forecasting.

New Economics Papers: this item is included in nep-cba, nep-for and nep-mac
Date: 2011-05
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Persistent link: http://EconPapers.repec.org/RePEc:chb:bcchwp:626

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