Estimation of economic development in Papua New Guinea: linear trend analysis or moving average model?

Abstract

A time series analysis is often used for estimation of economic development of countries. However, the prediction based on development of macroeconomic indicators might be analyzed by various models. This article aims to verify the hypothesis of differences in predictions using linear trend analysis and moving average model on the example of Papua New Guinea using the indicators such as gross domestic product, the growth of gross domestic product, inflation, merchandise trade balance and budgetary balance as percentage of gross domestic product. It was found out that these two types of analyses considerably diverge in their results.