Linear Trend Analysis or 'Bottom-up' Approach in the Economic Forecast on the Case of Papua New Guinea

摘要

Estimations of economic development of countries use often a time series analysis. The prediction based on development of macroeconomic indicators might be analyzed by various models. The aim of this article is to verify the hypothesis of differences in predictions using our linear trend analysis and International Monetary Fund's "buttom-up" approach. The example of Papua New Guinea was chosen by using the indicators such as gross domestic product, the growth of gross domestic product, inflation, current account and budgetary balance as percentage of gross domestic product. It was found out that these two types of analyses considerably diverge in their results.