Mathematical prediction of the annual marginal capital-output ratio based on a probabilistic random walk methodology

Jose Reyes Bernal-Bellon; Jaime Rodriguez; Javier Oswaldo Rodriguez Velasquez; Sandra Catalina Correa Herrera; Signed Esperanza Prieto Bohorquez; Jorge Eliecer Gaitan Mendez

doi:10.4067/S0718-88702023000100137

Authors

Jose Reyes Bernal-Bellon GEDES, Universidad Antonio Nariño
Jaime Rodriguez GEDES, Universidad Antonio Nariño
Javier Oswaldo Rodriguez Velasquez Grupo Insight
Sandra Catalina Correa Herrera Grupo Insight
Signed Esperanza Prieto Bohorquez Grupo Insight
Jorge Eliecer Gaitan Mendez GEICOS, Universidad Agustiniana

DOI:

https://doi.org/10.4067/S0718-88702023000100137

Keywords:

Marginal capital product ratio, probability, macroeconomics, economic growth rate

Abstract

It has been shown that the variability of the marginal capital product ratio is what determines the growth rate of economies according to Harrod’s model; therefore, it is important to predict its behavior. This paper develops a methodology based on probabilistic random walk to predict the annual marginal capital product ratio of Colombia for the year 2017 based on information from the Penn World Table database from 1993 to 2016. It was found that this variable has underlying mathematical orders, which allows its prediction with an accuracy of 97.69%.

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References

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