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Nowcasting Portuguese tourism exports
Given the increasing importance of the continuous monitoring of economic activity, techniques that allow taking advantage of the timely releases of high-frequency data play a key role in short-term forecasting. This article compares two single-equation approaches, namely the traditional bridge models and the more recent Mixed Data Sampling (MIDAS) regressions, to nowcast Portuguese quarterly tourism exports. We consider different specifications of bridge and MIDAS models, as well as combinations of nowcasts, in a recursive pseudo real-time exercise. The evidence is in favour of using short-term indicators for nowcasting tourism exports. MIDAS regressions tend to outperform bridge equations, especially when less current-quarter information is available. The best results are always obtained from a combination of nowcasts from a MIDAS specification with autoregressive dynamics.
Banco de Portugal Economic Studies