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Forecasting Aggregate Demand in West African Economies. The Influence of Immigrant Remittance Flows and of Asymmetric Error Correction

Author

Listed:
  • Jumah, Adusei

    (Department of Economics and Finance, Institute for Advanced Studies and Department of Economics, University of Vienna)

  • Kunst, Robert M.

    (Department of Economics and Finance, Institute for Advanced Studies and Department of Economics, University of Vienna)

Abstract

In a panel of West African countries, we investigate whether data on immigrant remittance flows can be used to improve on predictive accuracy of aggregate demand in a systematic way. The results of the prediction experiments are compared to traditional significance tests of asymmetric error correction and of the exogenous remittance variable. We find that there is a considerable discrepancy between statistical hypothesis testing and the results from the forecast comparison. In particular, while remittances yield significant coefficients for at least some of the accounts aggregates, they do not contribute to improved forecasting accuracy.

Suggested Citation

  • Jumah, Adusei & Kunst, Robert M., 2005. "Forecasting Aggregate Demand in West African Economies. The Influence of Immigrant Remittance Flows and of Asymmetric Error Correction," Economics Series 168, Institute for Advanced Studies.
    • Handle: RePEc:ihs:ihsesp:168
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    File URL: https://irihs.ihs.ac.at/id/eprint/1618
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Remittances; Time series; Prediction; Cointegration net exports;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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