Application of ARIMA Model in the Prediction of the Gross Domestic Product

Abstract

GDP is an important index that is used to reflect the economy development and people's income. This paper chooses the annual data of Chinese GDP from 1978 to 2014 as the research object, and establishes ARIMA (2, 4, 2) model by applying the Eviews6.0 software. Then, the paper applies this model to forecast the GDP of the following five years, and compares the forecast values with the actual values. The result shows that this model is effective to forecast the GDP in a short term. In the end, the GDP of the following year is forecasted. i indicates the auto regressive coefficient, and i is the moving average coefficient.