## Short-Term Forecasting: Projecting Italian GDPone Quarter to Two Years Ahead

_IMF Working Papers, August 1, 2001_

## Source details

**Canonical URL:** [Short-Term Forecasting: Projecting Italian GDPone Quarter to Two Years Ahead](https://www.imf.org/en/publications/wp/issues/2016/12/30/short-term-forecasting-projecting-italian-gdpone-quarter-to-two-years-ahead-15275)

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## Bibliographic details
- Authors: Matteo Iacoviello
- Published: August 1, 2001
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451853216.001

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### Summary
- Paper presents a "bridge model" for short-run (one or two quarters ahead) forecasting of Italian GDP, relying on industrial production and survey indicators as key variables that can help in providing a real-time first GDP estimate.
- For a one- to two-year horizon, the paper formulates and estimates a Bayesian VAR (BVAR) model of the Italian economy.
- Both the "bridge" and the BVAR model can supplement traditional judgmental or structural econometric forecasts.
- Given their simplicity and their good forecasting power, the framework may be usefully extended to other variables as well as to other countries.

### Models and methods
- Bridge model:
  - Designed for short-run (one or two quarters ahead) GDP forecasting.
  - Relies on industrial production and survey indicators as key predictors for real-time first GDP estimates.
- Bayesian VAR (BVAR) model:
  - Formulated and estimated for a one- to two-year forecasting horizon of the Italian economy.
- Intended use:
  - Supplementing traditional judgmental or structural econometric forecasts.
  - Potential extension to other variables and other countries.

### Key findings and claims
- The bridge model and the BVAR model exhibit "good forecasting power" for their respective horizons.
- Simplicity of the framework is emphasized as an advantage for practical forecasting applications.

### Subjects and keywords
- Subject: Cyclical indicators, Econometric analysis, Economic growth, GDP forecasting, Industrial production, National accounts, Production, Production index, Vector autoregression
- Keywords: Bayesian Vector Autoregressions, Cyclical indicators, Forecasting, GDP, GDP estimate, GDP forecast, GDP forecasting, GDP growth, growth forecast, growth YOY, Industrial production, leading indicators, Production index, Vector autoregression, WP

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## Content in this bundle

- **Short-Term Forecasting:  Projecting Italian GDP, One Quarter to Two Years Ahead - WP/01/109**
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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/30/short-term-forecasting-projecting-italian-gdpone-quarter-to-two-years-ahead-15275_