Regionalizing National-Level Growth Projections in the Visegrad Countries – The Issue Of Ex-Post Rescaling

Balazs Pager () and Zsuzsanna Zsibókb
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Balazs Pager: Centre for Economic and Regional Studies, Hungary
Zsuzsanna Zsibókb: Centre for Economic and Regional Studies, Hungary

Romanian Journal of Regional Science, 2020, vol. 14, issue 1, 1-24

Abstract: Regional economic inequalities in the countries of the Visegrad Group appear to be persistent in the long run, and many empirical studies suggest that their further increase is expected, at least in the medium run. Our study provides empirical results with a methodological focus concerning the long-term prediction of regional economic growth in the Visegrad countries. Our method delivers sub-national gross domestic product projections in a spatial downscaling approach according to which a selected national-level predicted growth path is downscaled to the regional level. In order to keep the regional results consistent with the national-level prediction, an ex-post proportional rescaling is needed which assures that the regional GDP values sum up to the projected national-level aggregate. This article examines the issues emerging from the practice of ex-post rescaling and uses out-of-sample tests on historical data sets to analyse the consequences of various methodological options. Taking into account the pros and cons, our study argues for the usefulness of ex-post rescaling in the case of the regional GDP downscaling in the Visegrad countries.

Keywords: Regionalization; projections; predictive capacity; gross domestic product; Visegrad countries (search for similar items in EconPapers)
JEL-codes: C53 O11 O47 R11 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:rrs:journl:v:14:y:2020:i:1:p:1-24

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