Forecasting Activity at Etla in 1971–2018

The Research Institute of the Finnish Economy (Etla) started its business cycle forecasting activity in 1971. Forecasts have thus been published for almost half of a century. The foundations of forecasting have remained the same during this time. Some changes have, however, been implemented in the organization of the activity and in the tools used. In this memorandum the development of forecasting activity is described from its beginning. About twenty years the forecasts were produced by a matrix organization. The institute was divided into thematic research groups of which each produced the forecasts of its sector during the forecasting process. In 1989 a separate forecasting group was founded. At first, it was a part of a research program called ”forecasting activity”. Later, it was organized as a part of the research program ”macroeconomy, international economy and business cycles”. In the middle of the forecasting process have been the calculation framework based on the national accounts and the macroeconomic model of the institute. At first, these were integrated to each other. Nowadays they are separate. During the second half of the 1990s, the international macroeconomic model NiGEM was taken into use in forecasting and simulation of the international economy. Because Etla’s forecasts are detailed in terms of branches of industry, the institute’s input-output model is an important tool in producing the output forecasts. The main forecast publication is Suhdanne that has been published 2 times and occasionally even 4 times a year. In the 1990s the whole book was published in English, too, later just the extended summary. Since September 2016 Suhdanne is published also as an internet version, in addition to the paper one.