Nowcasting the Scottish Economy

Allan, Grant and Koop, Gary and McIntyre, Stuart and Smith, Paul (2014) Nowcasting the Scottish Economy. In: RSAI:BIS, 2014-08-19 - 2014-08-21, Regional Science Association International: British and Irish Section.

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Abstract

The delays in the release of macroeconomic variables such as GDP mean that policymakers do not know their current values. Thus, nowcasts, which are estimates of current values of macroeconomic variables, are becoming increasingly popular. This paper takes up the challenge of nowcasting Scottish GDP growth. Nowcasting in Scotland, currently a government o!ce region within the United Kingdom, is complicated due to data limitations. For instance, key nowcast predictors such as industrial production are unavailable. Accordingly, we use data on some non-traditional variables and investigate whether UK aggregates can help nowcast Scottish GDP growth. Such data limitations are shared by many other sub-national regions, so we hope this paper can provide lessons for other regions interested in developing nowcasting models.

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