Forecasting Spanish economic activity in times of COVID-19 by means of the RT-LEI and machine learning techniques

Carlos Poza and Manuel Monge

Applied Economics Letters, 2023, vol. 30, issue 4, 472-477

Abstract: The main aim of this paper is to analyse and estimate the behaviour of the Spanish economic activity in the next 12 months, by means of a Real-Time Leading Economic Indicator (RT-LEI), based on Google Trends, and the real GDP. We apply methodologies based on fractional integration and cointegration to measure the degree of persistence and to examine the long-term relationship. Finally, we carry out a forecast using a Machine Learning model based on an Artificial Neural Network. Our results indicate that the Spanish economy will experience a contraction in 1Q-21 and will require strong measures to reverse the situation and recover the original trend.

Date: 2023
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DOI: 10.1080/13504851.2021.1994122

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