In this edition we discuss the ranking of economic forecasters which appeared in the Wall Street journal.
The WSJ has just done an appraisal of who turned out best in forecasting the US economy and has just announced the winners. One of the firm’s co-founders, Chris Varvares commented “It’s science, which is the modelling; it’s judgment, which is paying enough attention to the data and bringing in alternative perspectives to know when the model isn’t going to get it exactly right”. And he added the importance of “a good dosage of luck”. But are there consistently good macroeconomic forecasters? The consensus is yes, there are some you should pay regular attention to – and a few you should avoid. In the UK the forecasts of doom following a leave vote in the EU Referendum, produced by almost all reputable forecasters, has been used to cast doubt on macroeconomic forecasting expertise and in particular, the Bank of England and Treasury forecasts. But there’s no evidence these forecasters are sources you should shun, despite them getting it wrong! It is worth asking the question ‘would you expect any biases from the forecasting source?’.
“This week’s forecast” is a blog series, which covers commentaries, by members of the Centre for Marketing Analytics and Forecasting, about topical and controversial forecasts in the news.Back to News