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Official Economic Forecasting: the Relevance of the Canadian Experience for Transitional Economies


  • Grady, Patrick


Ministries of Economy (MoEs) in the transitional economies of the Former Soviet Union have been given the responsibility for economic forecasting. They have usually been created out of Ministries of Planning (MoPs). The required transformation from planning to forecasting, which requires a fundamental change in mindset and approaches, is discussed in the first part of this paper. In making this transformation from a MoP to a true MoE, there is much that official forecasters in transition economies can learn about economic forecasting from the experience of industrialized countries such as Canada. A brief overview of official economic forecasting as it is currently practised in Canada is provided in this paper. This includes econometric modelbased forecasting at the Department of Finance and the Bank of Canada and the recent prudent approach to fiscal forecasting initiated by the current Finance Minister to reduce the risk of unpleasant deficit surprises and thereby gain more credibility for fiscal policy. The adoption of the prudent approach underlines the perceived weakness of economic forecasting even in advanced industrialized economies. A summary of the advantages of forecasting with macroeconomic models based on the Canadian experience is presented in the paper.

Suggested Citation

  • Grady, Patrick, 1996. "Official Economic Forecasting: the Relevance of the Canadian Experience for Transitional Economies," MPRA Paper 25285, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:25285

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    References listed on IDEAS

    1. Leonall C. Andersen & Jerry L. Jordan, 1968. "Monetary and fiscal actions: a test of their relative importance in economic stabilization," Review, Federal Reserve Bank of St. Louis, issue Nov, pages 11-23.
    2. Ronald G. Bodkin & Lawrence R. Klein & Kanta Marwah, 1991. "A History of Macroeconometric Model-Building," Books, Edward Elgar Publishing, number 51.
    3. John F. Helliwell & Tom Maxwell & H. E. L. Waslander, 1979. "Comparing the Dynamics of Canadian Macro Models," Canadian Journal of Economics, Canadian Economics Association, vol. 12(2), pages 181-194, May.
    4. Peter Kennedy, 2003. "A Guide to Econometrics, 5th Edition," MIT Press Books, The MIT Press, edition 5, volume 1, number 026261183x, January.
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    More about this item


    economic forecasting in transition economics; role Ministries of Economy; economic forecasting in Canada;

    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • P20 - Economic Systems - - Socialist Systems and Transition Economies - - - General


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