Liu, GuanglingGupta, Rangan2007-10-032007-10-032007-06Liu, G & Gupta, R 2007, 'A small-scale DSGE model for forecasting the South African economy', South African Journal of Economics, vol. 75, no. 2, pp. 179–193. [http://www.blackwellpublishing.com/journal.asp?ref=0038-2280&site=2]0038-228010.1111/j.1813-6982.2007.00118.xhttp://hdl.handle.net/2263/3652This paper uses a version of Hansen's (1985) Dynamic Stochastic General Equilibrium (DSGE) model to forecast the South African economy. The calibrated model, based on annual data over the period of 1970-2000, is used to generate one- to eight-quarters-ahead out-of-sample forecast errors for the period of 2001:1 to 2005:4. The forecast errors are then compared with the unrestricted versions of the Classical and Bayesian VARs. A Bayesian VAR with relatively loose priors outperforms both the classical VAR and the DSGE model.504117 bytesapplication/pdfenBlackwell. The definitive version is available at www.blackwell-synergy.comDynamic stochastic general equilibrium (DSGE) modelVAR modelBVAR modelForecast accuracyDynamic stochastic general equilibrium (DSGE) forecastsVAR forecastsBVAR forecastsSouth African economySouth Africa -- Economic conditionsEconomic forecasting -- Econometric models -- South AfricaPostprint Article