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The past, present, and future of macroeconomic forecasting

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  • Francis X. Diebold

Abstract

Broadly defined, macroeconomic forecasting is alive and well. Nonstructural forecasting, which is based largely on reduced-form correlations, has always been well and continues to improve. Structural forecasting, which aligns itself with economic theory and, hence, rises and falls with theory, receded following the decline of Keynesian theory. In recent years, however, powerful new dynamic stochastic general equilibrium theory has been developed, and structural macroeconomic forecasting is poised for resurgence.

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  • Francis X. Diebold, 1997. "The past, present, and future of macroeconomic forecasting," Working Papers 97-20, Federal Reserve Bank of Philadelphia.
    • Handle: RePEc:fip:fedpwp:97-20
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    Keywords

    Forecasting;

    JEL classification:

    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods

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