Forecasting Issue

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NWecon
Posts: 1
Joined: Wed Feb 19, 2014 9:33 am

Forecasting Issue

Postby NWecon » Wed Feb 19, 2014 9:42 am

Using EViews 8 -

Despite having a good overall fit and significant coefficients, many of my models have a large gap between the fitted regression line and the actual value for within the last period of actual data for the dependent variable. As shown below.

When I attempt to forecast out-of-sample this creates a substantial "jump-off" between the last actual value and the forecasts based upon the trend-line relationship. This forces me to make adjustments to the forecast value offline. Is there a way to force the forecast to start from the last actual value rather than continuing from the fitted values generated by the regression?

Any ideas would be greatly appreciated.
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