EconPapers    
Economics at your fingertips  
 

How helpful are spatial effects in forecasting the growth of Chinese provinces?

Eric Girardin () and Konstantin Kholodilin ()

No 15/2010, BOFIT Discussion Papers from Bank of Finland, Institute for Economies in Transition

Abstract: In this paper, we make multi-step forecasts of the annual growth rates of the real Gross Regional Product (GRP) for each of the 31 Chinese provinces simultaneously. Beside the usual panel data models, we use panel models that explicitly account for spatial dependence between the GRP growth rates. In addition, the possibility of spatial effects being different for different groups of provinces (Interior and Coast) is allowed for. We find that both pooling and accounting for spatial effects helps substantially improve the forecast performance compared to the benchmark models estimated for each of the provinces separately. It is also shown that the effect of accounting for spatial dependence is even more pronounced at longer forecasting horizons (the forecast accuracy gain as measured by the root mean squared forecast error is about 8% at the 1-year horizon and exceeds 25% at the 13- and 14-year horizon).

Date: 2010-08-18
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Published in Published in Journal of Forecasting, Vol. 30, Issue 7, Nov. 2011, pp. 622-643

Downloads: (external link)
https://helda.helsinki.fi/bof/bitstream/123456789/8077/1/167007.pdf (application/pdf)

Related works:
Journal Article: How helpful are spatial effects in forecasting the growth of Chinese provinces? (2011) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bof:bofitp:2010_015

Access Statistics for this paper

More papers in BOFIT Discussion Papers from Bank of Finland, Institute for Economies in Transition Bank of Finland, BOFIT, P.O. Box 160, FI-00101 Helsinki, Finland. Contact information at EDIRC.
Bibliographic data for series maintained by Minna Nyman ().

 
Page updated 2019-12-08
Handle: RePEc:bof:bofitp:2010_015