
2
Fo r ecasting Indian Macr oe conomic Variables
Using Medium-Scale VAR Models
Goodness C. Aye
University of Pretoria
Pami Dua
University of Delhi
Rangan Gupta
University of Pret oria
CONTENTS
2.1 Introduction . .. .. .. . . . .. . . .. . . . .. .. .. . .. . . .. . . . . . . . .. . . . . . .. .. . . . . 37
2.2 Econometric Models . . . . . . . . .. . . . . . .. .. .. . . . .. . . .. . . . .. .. .. . .. . . . 39
2.2.1 VAR and BVAR . .. .. . . . . . .. .. . . . . . .. . . .. . . . .. . . .. . .. . . .. 39
2.2.2 FAVAR and BFAVAR . . . . .. .. . . . . . .. . . .. . . . .. . . .. . .. . . .. 42
2.2.3 Forecast evaluation . . .. . . .. . . . . . . . .. . . . .