Evaluating the role judgment plays in forecast accuracy

Article Abstract:

The role of judgment in the process of producing a forecast is investigated through the use of a real-time econometricmodel of the macroeconomy. First, the impact of adjustment constants on the altering of statistical results is examined. Forecasts from the Michigan Quarterly Econometric Model are then given an empirical analysis through a special data set which isolates the significance of judgment. It is concluded that adjustment constants, if carefully utilized, can keep models on track overthe forecast horizon, since they can handle model misspecifications and data innacuracies well.

Methods, Econometrics, Economic forecasting, Forecasting, Macroeconomics

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Oil shocks: How can OECD countries manage them best?

Article Abstract:

The Gulf crisis of 1990-1991 presented the strong possibility of future oil shocks. Despite attempts to curb energy expenditures in major countries, studies indicate that rising oil prices create negative effects such as temporary recession, production and employment losses and continuous inflation. Economic policies in the Organization for Economic Cooperation and Development were tested for their ability to control oil shock effects.

Economic policy, International economic relations, Organization for Economic Cooperation and Development

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