A Grey Model Study of Forecasting Selected Turkish Macroeconomic Variables

We have applied Grey model based prediction models to predict gross national product, inflation index and annual interest rates for Turkey for the period of 1989.01-2004.12. Since Turkish economy went through two deep financial crises, the performance of prediction model for these variables in the mentioned period is a good test of forecasting ability of the models. We have found that Grey model performs much better for the more regular series, as expected for the short-term time-series prediction models.