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The impossibility of accurate macro‐economic forecasting
Author(s) -
Ormerod Paul
Publication year - 1997
Publication title -
economic affairs
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.24
H-Index - 18
eISSN - 1468-0270
pISSN - 0265-0665
DOI - 10.1111/1468-0270.00009
Subject(s) - impossibility , macro , term (time) , economic forecasting , economics , econometrics , computer science , operations research , engineering , political science , law , physics , quantum mechanics , programming language
The macro‐economic short‐term forecasting record in the West over the past thirty years is very poor. Modern non‐linear signal processing techniques can be used to show that such inaccuracy is a deep and inherent property of the data themselves. The forecasting record simply cannot be improved. Much economic policy still focuses on short‐term intervention based on short‐term forecasts. But such efforts are futile because forecasts of sufficient accuracy over time cannot be made.