We consider forecasting in a small and unstable regional economy subject to structural breaks. In this context, we work with two types of regime-shifting databased models rising cointegration theory. The objective of the present work is to analyze the out-of-sample forecasting performance of the two approaches used to construct a short-term regional econometric model: stochastic and deterministic time varying parameters models. The forecasting experiments will be illustrated by specifying and estimating an econometric model for Extremadura, a small and unstable region in southwestern Spain.
|Original language||English (US)|
|Number of pages||23|
|State||Published - Apr 2003|
ASJC Scopus subject areas
- Geography, Planning and Development
- Earth-Surface Processes