Nonlinear models outperform linear in forecasting Brazilian economic growth with breaks
The article compares linear and nonlinear models to forecast Brazilian GDP growth, considering structural breaks. Nonlinear models perform better in forecasting, especially when accounting for breaks like the Collor Plans. These breaks are crucial for understanding the Brazilian business cycle. The study shows that nonlinear models are more accurate in predicting GDP growth rates, highlighting the importance of considering structural changes in economic forecasting.