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Forecasting with preliminary data: a comparison of two methods

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  • Sucharita Ghosh
  • Donald Lien

Abstract

This study examines two alternate methods, a vector autoregression error correction model and a state space model, to forecast revised United States trade balance figures. Both these methods incorporate preliminary and revised trade data. The results obtained from these methods were compared to the benchmark forecasts generated by revised-data-only models. This Study finds that the state space model performs worse than the benchmark. The vector autoregression model performs better than the benchmark only in the one-step forecast. These results indicate that incorporating preliminary data may not be useful in forecasting the revised data.

Suggested Citation

  • Sucharita Ghosh & Donald Lien, 2001. "Forecasting with preliminary data: a comparison of two methods," Applied Economics, Taylor & Francis Journals, vol. 33(6), pages 721-726.
    • Handle: RePEc:taf:applec:v:33:y:2001:i:6:p:721-726
    DOI: 10.1080/00036840122370
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