Extrapolative techniques’ predictive capacity in the spatial downscaling of the Hungarian gross domestic product
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Date
2019
Authors
Zsibók, Zsuzsanna
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Abstract
The dynamics of GDP (gross domestic product) and its spatial distribution are constantly at the forefront of economic and regional studies. This study intends to understand better Hungarian sub-national economic processes by checking the predictive capacity of various extrapolative forecasting techniques with out-of-sample testing. The author focuses on a top-down projection method that allocates regional GDP based on an existing, external, national-level, long-term projection. GDP is analysed in its aggregate value and in a decomposition followed in the growth accounting literature. The main question of the out-of-sample tests is the level of usefulness of historical national- and regional-level data in predicting Hungarian regional-level GDP in the long run. The author proposes a specific weighting scheme that combines past regional-level growth rates and predicted national-level growth rates to arrive at different regional-level predictions. She concludes that during the relatively short test period, the average historical inter-regional distribution did not have a determining role in predicting future regional GDP values. The national-level growth processes largely explain regional-level GDP, and the use of certain combinations of past regional-level growth rates and predicted national-level growth rates are recommended to project regional GDP in the long run.
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Keywords
gazdasági előrejelzés , GDP , területi megoszlás
Citation
Hungarian Statistical review: Journal of the Hungarian Central Statistical Office 2: (2) pp. 51-78 (2019)