Information or Institution?: On the Determinants of Forecast Accuracy

Roland Döhrn and Christoph Schmidt

Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), 2011, vol. 231, issue 1, 9-27

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, which serves as an indicator of the information available at the time a forecast is produced. 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.

Keywords: Forecast accuracy; forecast revisions; forecast horizon; economic activity; Forecast accuracy; forecast revisions; forecast horizon; economic activity (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26)

Downloads: (external link)
https://doi.org/10.1515/jbnst-2011-0103 (text/html)

Related works:
Working Paper: Information or Institution? – On the Determinants of Forecast Accuracy (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:jns:jbstat:v:231:y:2011:i:1:p:9-27

DOI: 10.1515/jbnst-2011-0103

Access Statistics for this article

Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik) is currently edited by Peter Winker

More articles in Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik) from De Gruyter
Bibliographic data for series maintained by Peter Golla ().