EEU Policy Brief #3
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Authors Matthew Gordon and Ivan Mendieta-Muñoz have put together a research brief on Nowcasting Regional GDP in Utah
Using Dynamic Factor Models.
Key findings include:
- Dynamic factor models can be used to obtain nowcasts for Utah’s GDP using either expectation-maximization
or two-stage principal components methods, thus providing a real-time read on the heartbeat of Utah’s Economy. - Nowcasting Utah’s GDP should be carried out using the two-stage principal components
method.
The models constructed using this method show moderate to large improvements in forecasting
accuracy (11% to 28%) compared to other benchmark models, and can accurately track the peaks and
troughs of Utah’s GDP as more observations become available.
Accessibility Notice for Reference Materials:
The documents provided here are for informational and reference purposes. We are committed to ensuring digital accessibility for all users. If you encounter any barriers within these PDF documents or require the information in an alternate format, please contact our team for necessary assistance.
Read the full policy brief: Nowcasting Regional GDP in Utah Using Dynamic Factor Models