/Forecasting-GDP-with-for-Canada

This an analysis on time series data using data from the Fed website for Canada to forecast its GDP as well as final consumption

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1. Forecasting-GDP-with-for-Canada

1.1 Introduction

For this assignment, the main source of data will be the Federal Reserve Economics Data (FRED) database. The outcome variable (Yt) is the growth rate of Canada’s quarterly Real Gross Domestic Product (GDP). Canada’s real GDP is the total value of goods and services produced in Canada for a given period, as adjusted for inflation, and has been growing steadily since the 1960s with a few breaks in the trend. The primary variable (Xt) is the growth rate of Canada’s general government final consumption expenditure, which has also been growing at a steady rate up to date. This analysis will cover the period from the 1st quarter of 1961 to the 3rd quarter of 2023 with a total of 251 observations for each variable. The outcome variable (Yt) is denoted as GDPGR and the primary variable (Xt) as FCEGR.

1.2 Research Questions

  • Does past GDP growth rate have a significant effect on forecasting future GDP growth rate?
  • Is there a significant pattern between past and future periods in general government final consumption expenditure growth rate?
  • Are the past GDP and general government final consumption growth rates jointly significant in predicting future values of GDP growth rate?

1.3 Hypotheses:

  • H0,1: Past GDPGR does not have statistical significance in forecasting GDPGR in the future
  • H1,1: Past GDPGR has statistical significance in forecasting future GDPGR.
  • H0,2: Past FCEGR does not have statistical significance in forecasting GDPGR in the future