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Forecasting Trade Deflators In Ireland

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  • Papa, Javier
  • et., al.

Abstract

This technical note provides an overview and rationale for recently developed forecast models for Irish export and import prices (trade deflators) in both Merchandise Goods and Services. These forecasts constitute a significant component of the GDP Deflator forecast used in the Department of Finance’s overall macroeconomic forecast, produced for the annual Budget and the Stability Programme Updates. New forecasting models for export and import prices were required due to recent revisions (July 2016) to the Central Statistics Office’s (CSO) National Income and Expenditure (NIE) data series. Based on the revised NIE quarterly data for the past 16 years (2000:Q1 – 2016:Q2), new short term forecasts of the trade deflators for Ireland over the period 2016:Q3- 2017:Q4 are presented at the end of this note. The main results show that trade deflator forecasts presented here should be able to predict future export and import prices with a fair degree of accuracy (i.e. within one standard error bands). However, the forecasts quality is conditional on the absence of major turning points in the series, in particular for the Services trade deflators.

Suggested Citation

  • Papa, Javier & et., al., 2016. "Forecasting Trade Deflators In Ireland," MPRA Paper 116754, University Library of Munich, Germany, revised Dec 2016.
    • Handle: RePEc:pra:mprapa:116754
    as

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    References listed on IDEAS

    as
    1. José Manuel Campa & Linda S. Goldberg, 2005. "Exchange Rate Pass-Through into Import Prices," The Review of Economics and Statistics, MIT Press, vol. 87(4), pages 679-690, November.
    2. Eleanor Doyle, 2004. "Exchange rate pass-through in a small open economy: the Anglo-Irish case," Applied Economics, Taylor & Francis Journals, vol. 36(5), pages 443-455.
    3. Byrne, Stephen & O'Brien, Martin, 2015. "The Changing Nature of Irish Exports: Context, Causes and Consequences," Quarterly Bulletin Articles, Central Bank of Ireland, pages 58-72, April.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Trade; Deflators; Forecasting; Ireland;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

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