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Title:Information or institution? On the determinants of forecast accuracy PDF Logo
Authors:Döhrn, Roland
Schmidt, Christoph M.
Issue Date:2010
Series/Report no.:Ruhr economic papers 201
Abstract:The accuracy of macroeconomic forecast depends on various factors, most importantly the mix of analytical methods used by the individual forecasters, the way that their personal experience is shaping their identification strategies, but also their efficiency in translating new information into revised forecasts. In this paper we use a broad sample of forecasts of German GDP and its components to analyze the impact of institutions and information on forecast accuracy. We find that forecast errors are a linear function of the forecast horizon. This result is robust over a variety of different specifications. As better information seems to be the key to achieving better forecasts, approaches for acquiring reliable information early seem to be a good investment. By contrast, the institutional factors tend to be small and statistically insignificant. It has to remain open, whether this is the consequence of the efficiency-enhancing competition among German research institutions or rather the reflection of an abundance of forecast suppliers.
Subjects:forecast accuracy
forecast revisions
forecast horizon
economic activity
JEL:C53
E27
E01
ISBN:978-3-86788-228-6
Document Type:Working Paper
Appears in Collections:Ruhr Economic Papers, RWI
Publikationen von Forscherinnen und Forschern des RWI

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