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Tracking the Ups and Downs in Indonesia’s Economic Activity During COVID-19 Using Mobility Index: Evidence from Provinces in Java and Bali

Yose Rizal Damuri, Prabaning Tyas, Haryo Aswicahyono, Lionel Priyadi, Stella Kusumawardhani and Ega Kurnia Yazid
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Yose Rizal Damuri: Centre for Strategic and International Studies (CSIS), Indonesia
Prabaning Tyas: Tenggara Strategics, Indonesia
Stella Kusumawardhani: Tenggara Strategics, Indonesia
Ega Kurnia Yazid: Centre for Strategic and International Studies (CSIS), Indonesia

No DP-2021-18, Working Papers from Economic Research Institute for ASEAN and East Asia (ERIA)

Abstract: A timely and reliable prediction of economic activities is crucial in policymaking, especially in the current COVID-19 pandemic situation, which requires real-time decisions. However, making frequent predictions is challenging due to the substantial delays in releasing aggregate economic data. This study aims to nowcast Indonesia’s economic activities during the COVID-19 pandemic using the novel high-frequency Facebook Mobility Index as a predictor. Employing mixed-frequency, mixed-data sampling, and benchmark least-squares models, we expanded the mobility index and used it to track the growth dynamics of the gross regional domestic product of provinces in Java and Bali and performed a bottom-up approach to estimate the aggregated economic growth of the provinces altogether. Our results suggested that the daily Facebook Mobility Index was a considerably reliable predictor for projecting economic activities on time. All models almost consistently produced reliable directional predictions. Notably, we found the mixed data sampling-autoregressive model to be slightly superior to the other models in terms of overall precision and directional predictive accuracy across observations.

Keywords: COVID-19; nowcasting; GDP; mobility; Mixed-frequency (search for similar items in EconPapers)
JEL-codes: C20 C53 R11 (search for similar items in EconPapers)
Date: 2021-07-05
New Economics Papers: this item is included in nep-big, nep-isf, nep-mac, nep-sea and nep-ure
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