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Theories, techniques and the formation of German business cycle forecasts: Evidence from a survey among professional forecasters

Author

Listed:
  • Jörg Döpke

    (University of Applied Sciences Merseburg (Hochschule Merseburg))

  • Ulrich Fritsche

    () (Universität Hamburg)

  • Gabi Waldhof

    (Martin-Luther-Universität Halle-Wittenberg)

Abstract

The paper reports results of a survey among active forecasters of the German business cycle. Relying on 82 respondents from 37 different institutions, we investigate what models and theories forecasters subscribe to and find that they are pronounced conservative in the sense, that they overwhelmingly rely on methods and theories that have been well-established for a long time, while more recent approaches are relatively unimportant for the practice of business cycle forecasting. DSGE models are mostly used in public institutions. In line with findings in the literature there are tendencies of “leaning towards consensus” (especially for public institutions) and “sticky adjustment of forecasts” with regard to new information. We find little evidence that the behaviour of forecasters has changed fundamentally since the Great Recession but there are signs that forecast errors are evaluated more carefully. Also, a stable relationship between preferred theories and methods and forecast accuracy cannot be established.

Suggested Citation

  • Jörg Döpke & Ulrich Fritsche & Gabi Waldhof, 2017. "Theories, techniques and the formation of German business cycle forecasts: Evidence from a survey among professional forecasters," Working Papers 2017-002, The George Washington University, Department of Economics, Research Program on Forecasting.
  • Handle: RePEc:gwc:wpaper:2017-002
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    File URL: http://www2.gwu.edu/~forcpgm/2017-002.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Forecast error evaluation; questionnaire; survey; business cycle forecast; professional forecaster;

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods

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