The Improvement of Unemployment Rate Predictions Accuracy

Mihaela Simionescu

Prague Economic Papers, 2015, vol. 2015, issue 3, 274-286

Abstract: This research is related to the assessment of alternative unemployment rate predictions for the Romanian economy, the forecasts being provided by three anonymous forecasters: F1, F2 and F3. F3 provided the most accurate forecasts for the horizon 2001-2014, while F2 predictions are the less accurate according to U1 Theil's statistic and according to a new method that has not been used before in literature in this context. The multi-criteria ranking was applied to make a hierarchy of the forecasters regarding the accuracy and five important accuracy measures were taken into account at the same time: mean errors, mean squared error, root mean squared error, U1 and U2 statistics of Theil. The combined forecasts of forecasters' predictions are the best strategy to improve the forecasts accuracy. The filtered and smoothed original predictions based on Hodrick-Prescott filter, respectively Holt-Winters technique, are a good strategy of improving the accuracy only for F2 expectations. The assessment and improvement of forecasts accuracy have an important contribution in growing the quality of decision-making process.

Keywords: forecasts; accuracy; multi-criteria ranking; combined forecasts; Hodrick-Prescott filter; Holt-Winters smoothing exponential technique (search for similar items in EconPapers)
JEL-codes: C51 C53 E21 E27 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://pep.vse.cz/doi/10.18267/j.pep.519.html (text/html)
http://pep.vse.cz/doi/10.18267/j.pep.519.pdf (application/pdf)
free of charge

Related works:
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:prg:jnlpep:v:2015:y:2015:i:3:id:519:p:274-286

Ordering information: This journal article can be ordered from
Editorial office Prague Economic Papers, University of Economics, nám. W. Churchilla 4, 130 67 Praha 3, Czech Republic
http://pep.vse.cz

DOI: 10.18267/j.pep.519

Access Statistics for this article

Prague Economic Papers is currently edited by Klára Pavlová

More articles in Prague Economic Papers from Prague University of Economics and Business Contact information at EDIRC.
Bibliographic data for series maintained by Stanislav Vojir ().