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Title: Nowcasting: An economist’s golden bow
Authors: Parasuram, Kolli
Keywords: Gross Domestic Product (GDP)
Dynamic Factor Modelling
Principal Component Analysis (PCA)
Index of Industrial Production
Consumer Price Index
Vector Auto Regression
Vector Error Correction Model
Issue Date: 2021
Publisher: Students of PGDBA Post Graduate Diploma in Business Analytics, IIM Calcutta
Series/Report no.: Vol.2;
Abstract: What does ‘nowcast’ mean here? It is the RBI’s forecast value for Indian GDP in Q3 of 2020, which they did for the first time using the Nowcasting Technique. Gross Domestic Product (GDP) is the most important measure to assess the economic state of the country. The country’s GDP is released 45 days (almost half a Quarter) post completion of the Quarter. This lag is impeding the Government from assessing the impact of its policies and updating them at the right time. This prompted economists to take more interest in accurately forecasting the country’s GDP. Traditionally, economists used simple forecasting techniques such as VAR, ARIMAX, VECM to forecast GDP. But since the last two years, nowcasting techniques rose to fame for forecasting macroeconomic indicators in Econometrics.
Appears in Collections:AINA 2.0 - Volume 2 Edition 2020-21

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