Forecasting Recessions in Turkey with Qual-VAR Models

K. Batu Tunay ()
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K. Batu Tunay: Yildiz Technical University, School of Vocational Studies

Business and Economics Research Journal, 2011, vol. 2, issue 4, 51

Abstract: This study aims to make out-of-sample forecasts of recessions using the data of Turkey between 1986-2010. Recession forecast is important for decision makers in every level since it increases efficiency of decision making. Forecasting method used in this study is Qual-VAR method which includes information obtained from qualitative and/or discrete variables into vector autoregressions (VAR). Qual-VAR method makes it possible to create dynamic forecasts of qualitative variable using standard VAR projections. The evaluation and interpretation of findings obtained with this method are very simple. The findings obtained indicate that a recession will not occur during next twentyfour months in Turkey. However, we can expect that the probability of a recession will be increasing after 2014.

Keywords: Recessions; forecasting; Gibbs sampling; state-space models; Qual VAR models (search for similar items in EconPapers)
JEL-codes: C32 C35 E32 E37 (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:ris:buecrj:0064

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