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Forecasting world trade: direct versus "bottom-up" approaches

Stephane Dees and Matthias Burgert

No 882, Working Paper Series from European Central Bank

Abstract: In a globalised world economy, global factors have become increasingly important to explain trade flows at the expense of country-specific determinants. This paper shows empirically the superiority of direct forecasting methods, in which world trade is directly forecasted at the aggregate levels, relative to "bottom-up" approaches, where world trade results from an aggregation of country-specific forecasts. Factor models in particular prove rather accurate, where the factors summarise large-scale datasets relevant in the determination of trade flows. JEL Classification: C53, C32, E37, F17

Keywords: factor models; forecasts; Time series models.; world trade (search for similar items in EconPapers)
Date: 2008-03
Note: 2544114
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Journal Article: Forecasting World Trade: Direct Versus “Bottom-Up” Approaches (2009) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbwps:2008882

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