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Our most academic publication offers research and surveys on monetary policy, national and international developments, banking, and more. The content is written for an economically informed readership—from the undergraduate student to the PhD.

Vol. 93, No. 3 (Posted 2011-05-01)

Regional Aggregation in Forecasting: An Application to the Federal Reserve’s Eighth District

by Kristie M. Engemann, Rubén Hernández-Murillo, and Michael T. Owyang

Hernández-Murillo and Owyang (2006) showed that accounting for spatial correlations in regional data can improve forecasts of national employment. This paper considers whether the predictive advantage of disaggregate models remains when forecasting subnational data. The authors conduct horse races among several forecasting models in which the objective is to forecast regional- or state-level employment.

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