The Netherlands Bank overhauls nowcasting model
Economic dynamics have become more complicated since the pandemic, economists say
Economists at The Netherlands Bank (DNB) have overhauled its nowcasting model to provide better early estimates of GDP growth.
The Dutch Forecasting Model for Real Time Output Growth (DFrog) is a dynamic factor model that combines 70 data series to produce its forecast. Indicators in the model include unemployment, industrial output, debit card transactions, financial market pricing and an estimate of economic sentiment extracted from articles in financial newspaper Het Financieele Dagblad.
In the
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