Hao, Tran Van, Recent Significant Advances in Estimating and Forecasting Theories and Economic Modelling: With Applications to ASEAN Investment Studies, Department of Economics, University of Wollongong, 2000.
The paper presents the basics of a new and flexible approach to statistically modelling the activities of multi-sectoral economies (Tran Van Hoa, 1992) and applies it to study investment in five major East Asian countries (ie, China, Indonesia, Korea, Malaysia and Thailand) during the period 1970-1993 using recent World Bank databases. The approach dominates the computable general equilibrium method in its data-consistent structure. The paper also describes the fundamentals of the new two-stage hierarchical information (2SHI) estimation and forecasting theory (Tran Van Hoa, 1985, 1986a, 1993b, Tran Van Hoa and Chaturvedi, 1988, 1990, 1997) and its superior MSE properties for the general linear model and reports substantive empirical findings on estimates and ex-post forecasts of investment in these countries. Brief discussions on the foundation of alternative current estimation and forecasting methodologies in economic modelling and policy uses, on the significance of our empirical findings, and a comparison with results obtained from well-known methods such as the OLS, the maximum likelihood and the positive-part Stein (or empirical Bayes) will also be provided.