Forecasting world trade. Direct versus "bottom-up" approaches

Stephane Dees () and Matthias Burgert ()
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Matthias Burgert: Humboldt University, Berlin and ENSAE. Address - ENSAE, 3, avenue Pierre Larousse, 92245 Malakoff Cedex, France., http://www.ensae.fr/

No 882, Working Paper Series from European Central Bank

Abstract: In a globalised world economy, global factors have become increasingly important to explain trade-flows at the expense of country-specifc determinants. This paper shows empirically the superiority of direct forecasting methods, in which world trade is directly forecasted at the aggregate levels, relative to "bottom-up" approaches, where world trade results from an aggregation of country-specifc forecasts. Factor models in particular prove rather accurate, where the factors summarise large-scale datasets relevant in the determination of trade-flows. JEL Classification: C53, C32, E37, F17.

Keywords: World trade; Factor models; Forecasts; Time series models. (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-for and nep-int
Date: Written 2008-03
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