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Latin American Economic Review
Fig. 8 | Latin American Economic Review

Fig. 8

From: A dynamic factor model for the Mexican economy: are common trends useful when predicting economic activity?

Fig. 8

Observed forecast error for May 2016 (\(h = 1\)) and June 2016 (\(h = 2\)). PC (blue color), PC 2 (deep blue color), PLS (red color), PC 2 (deep red color), average of forecasts (gray color), and average 2 of forecasts (black color). The number 2 indicates that the models only considered the variables that satisfy \(\partial e_t | D_{ti} = 1 < 0\) and \(\text{Prob}(\partial e_t | D_{ti} = 1) < 0.10\) (color figure online)

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