Forecasting the Size Distribution of Financial Plants in Swedish Municipalities

Kurt Brännäs ()

No 478, Umeå Economic Studies from Umeå University, Department of Economics

Abstract: The paper studies the forecasting of a future size distribution of plants. As a model we use an open Markov chain model for macro data. Estimation is by reparametrization instead of by inequality restrictions using single equation least squares. The estimator is studied in a small Monte Carlo experiment for short time series lengths and macro data. Well-known mobility indices and a new idea of using a truncated transition probability matrix are discussed and also studied in the Monte Carlo experiment. For the financial plants (1984-1993) we find evidence of mobility of a downsizing nature. In a one-step-ahead forecast evaluation we find some overprediction.

Keywords: Open Markov chain; Mobility index; Reparametrization; Least squares estimation; Plant size; Municipality (search for similar items in EconPapers)
JEL-codes: C30 C50 G20 L20 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ecm, nep-ets and nep-tid
Date: 1998-10-04
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