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How useful is the carry-over effect for short-term economic forecasting?

Karl-Heinz Tödter

No 2010,21, Discussion Paper Series 1: Economic Studies from Deutsche Bundesbank

Abstract: The carry-over effect is the advance contribution of the old year to growth in the new year. Among practitioners the informative content of the carry-over effect for short-term forecasting is undisputed and is used routinely in economic forecasting. In this paper, the carry-over effect is analysed 'statistically' and it is shown how it reduces the uncertainty of short-term economic forecasts. This is followed by an empirical analysis of the carry-over effect using simple forecast models as well as Bundesbank and Consensus projections.

Keywords: forecast uncertainty; growth rates; carry-over effect; variance contribution; Chebyshev density (search for similar items in EconPapers)
JEL-codes: C16 C53 E37 (search for similar items in EconPapers)
Date: 2010
New Economics Papers: this item is included in nep-cba, nep-ecm and nep-for
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:bubdp1:201021

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