Besser geht's nicht - Genauigkeitsgrenzen von Konjunkturprognosen As Good as it Gets - Limits of Accuracy of Macroeconomic Short Term Forecasts
AbstractThe paper aims at determining upper boundaries of accuracy ("error minima") for German macroeconomic forecasts. The study is based on simulations with the RWI-model, a medium sized macroeconometric model for the FRG. A first upper limit of forecast accuracy is fixed by the accuracy of predetermined variables and outside sample stability of model relationships. Further limits are found by a decomposition of model forecast errors into "equation errors", "model errors" and "errors of dynamics". For forecasts of growth and inflation the model simulations suggest that (1) present forecast errors do not seem to have much potential for improvement; (2) primarily this potential seems to lie on the single equation level.
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Bibliographic InfoArticle provided by Justus-Liebig University Giessen, Department of Statistics and Economics in its journal Journal of Economics and Statistics.
Volume (Year): 224 (2004)
Issue (Month): 1-2 (February)
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More information through EDIRC
Upper error boundaries of macroeconomic forecasts; error taxonomy; macroeconometric models; simulation.;
Find related papers by JEL classification:
- C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
- E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
- E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
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