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Why are survey forecasts superior to model forecasts?


  • Clements, Michael P.

    (University of Warwick)


We investigate two characteristics of survey forecasts that are shown to contribute to their superiority over purely model-based forecasts. These are that the consensus forecasts incorporate the effects of perceived changes in the long-run outlook, as well as embodying departures from the path toward the long-run expectation. Both characteristics on average tend to enhance forecast accuracy. At the level of the individual forecasts, there is scant evidence that the second characteristic enhances forecast accuracy, and the average accuracy of the individualforecasts can be improved by applying a mechanical correction. Keywords: consensus forecast, model-based forecasts, long-run expectations.

Suggested Citation

  • Clements, Michael P., 2010. "Why are survey forecasts superior to model forecasts?," The Warwick Economics Research Paper Series (TWERPS) 954, University of Warwick, Department of Economics.
  • Handle: RePEc:wrk:warwec:954

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    References listed on IDEAS

    1. Samet, Dov, 1990. "Ignoring ignorance and agreeing to disagree," Journal of Economic Theory, Elsevier, vol. 52(1), pages 190-207, October.
    2. Lehrer, Ehud, 1996. "Mediated Talk," International Journal of Game Theory, Springer;Game Theory Society, vol. 25(2), pages 177-188.
    3. Shapley, Lloyd S. & Shubik, Martin, 1969. "On market games," Journal of Economic Theory, Elsevier, vol. 1(1), pages 9-25, June.
    4. Forges, Francoise M, 1986. "An Approach to Communication Equilibria," Econometrica, Econometric Society, vol. 54(6), pages 1375-1385, November.
    5. Françoise Forges, 1990. "Equilibria with Communication in a Job Market Example," The Quarterly Journal of Economics, Oxford University Press, vol. 105(2), pages 375-398.
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    More about this item


    consensus forecast ; model-based forecasts ; long-run expectations JEL Classification: C53 ; E37;

    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications

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