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Twenty-two years of Japanese institutional forecasts

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Author Info
Masahiro Ashiya

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Abstract

This paper evaluates accuracy and rationality of real GDP forecasts made by 38 Japanese private institutions over the past 22 years. It finds that about 80% of current-year forecasts and year-ahead forecasts made by them pass various tests for rationality. Moreover, the encompassing test reveals the following results: (a) All of these forecasts outperform the naïve forecasts; (b) About half of their current-year forecasts are inferior to the corresponding forecast of VAR, VECM, or the Japanese government; (c) Almost all of their year-ahead forecasts are significantly superior to the corresponding forecast of VAR or the Japanese government, but one-third of them are significantly inferior to VECM forecast; (d) The consensus forecast outperforms typical institution's forecast.

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Publisher Info
Article provided by Taylor and Francis Journals in its journal Applied Financial Economics Letters.

Volume (Year): 1 (2005)
Issue (Month): 2 (March)
Pages: 79-84
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Handle: RePEc:taf:apfelt:v:1:y:2005:i:2:p:79-84

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  1. Jansen, Dennis W. & Kishan, Ruby Pandey, 1996. "An evaluation of federal reserve forecasting," Journal of Macroeconomics, Elsevier, vol. 18(1), pages 89-109. [Downloadable!] (restricted)
  2. Ashiya, Masahiro, 2002. "Accuracy and rationality of Japanese institutional forecasters," Japan and the World Economy, Elsevier, vol. 14(2), pages 203-213, April. [Downloadable!] (restricted)
  3. Ashiya, Masahiro, 2003. "Testing the rationality of Japanese GDP forecasts: the sign of forecast revision matters," Journal of Economic Behavior & Organization, Elsevier, vol. 50(2), pages 263-269, February. [Downloadable!] (restricted)
  4. Hansen, Lars Peter & Hodrick, Robert J, 1980. "Forward Exchange Rates as Optimal Predictors of Future Spot Rates: An Econometric Analysis," Journal of Political Economy, University of Chicago Press, vol. 88(5), pages 829-53, October. [Downloadable!] (restricted)
  5. Chong, Yock Y & Hendry, David F, 1986. "Econometric Evaluation of Linear Macro-Economic Models," Review of Economic Studies, Blackwell Publishing, vol. 53(4), pages 671-90, August. [Downloadable!] (restricted)
  6. Stark, Tom & Croushore, Dean, 2002. "Forecasting with a real-time data set for macroeconomists," Journal of Macroeconomics, Elsevier, vol. 24(4), pages 507-531, December. [Downloadable!] (restricted)
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  7. Ashiya, Masahiro, 2007. "Forecast accuracy of the Japanese government: Its year-ahead GDP forecast is too optimistic," Japan and the World Economy, Elsevier, vol. 19(1), pages 68-85, January. [Downloadable!] (restricted)
  8. Oller, Lars-Erik & Barot, Bharat, 2000. "The accuracy of European growth and inflation forecasts," International Journal of Forecasting, Elsevier, vol. 16(3), pages 293-315. [Downloadable!] (restricted)
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  9. Anderson, Richard G. & Hoffman, Dennis L. & Rasche, Robert H., 2002. "A vector error-correction forecasting model of the US economy," Journal of Macroeconomics, Elsevier, vol. 24(4), pages 569-598, December. [Downloadable!] (restricted)
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