Random Forest as a Model for Czech Forecasting

Random forest models have recently gained popularity for economic forecasting. Earlier studies demonstrated their potential to provide early warnings of recession and serve as a competitive method older prediction models. This study offers the first evaluation random forecast Czech economy. The one-step-ahead forecasting results show high accuracy on data are proven outperform forecasts from Ministry Finance National Bank. following multi-step forecast, estimated next four quarters, shows similar those central institutions. main difference stems household industrial confidence variables, which significantly impact forecast. variable-importance analysis further emphasizes soft variables valuable determinants Overall, findings motivate other forecasters exercise this method.