Energy Consumption, Survey Data and the Prediction of Industrial Production in Italy

Domenico J. Marchetti () and Giuseppe Parigi
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Domenico J. Marchetti: Banca d'Italia

No 342, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: We investigate the prediction of Italian industrial production. We first specify a model based on electricity consumption; we show that the cubic trend in such a model mostly captures the evolution over time of the electricity coefficient, which can be well approximated by a smooth transition model � la Terasvirta, with no gains in predictive power, though. We also analyze the performance of models based on data of different business surveys. According to basic statistics of forecasting accuracy, the linear energy-based model is not outperformed by any other single model, neither by a combination of forecasts. However, a more comprehensive set of evaluation criteria sheds light on the advantages of using the whole information available. Overall, the best forecasting performance is achieved by estimating a combined model which includes among regressors both energy consumption and survey data.

Keywords: Italy; industrial production; energy (search for similar items in EconPapers)
JEL-codes: D24 L11 L9 (search for similar items in EconPapers)
Date: 1998-12
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Citations: View citations in EconPapers (6)

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Working Paper: Energy Consumption, Survey Data and the Prediction of Industrial Production in Italy (1998)
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:wptemi:td_342_98

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