Economic Forecasting

NICOLAS CARNOT is Head of the Domestic Economic Outlook Division at the Ministry of Finance, France. He has held several economist positions at the French Ministry of Finance and the International Monetary Fund. His research focuses on macroeconomics and macroeconomic modelling.VINCENT KOEN is Principal Economist at the Organisation for Economic Co-operation and Development (OECD) and one of the main authors of the OECD Economic Outlook. He was previously an economist at the International Monetary Fund and the French Central Bank. He has written a textbook on capital markets and numerous economic articles and holds a PhD from MIT.BRUNO TISSOT is Senior Economist at the Bank for International Settlements, Switzerland and previously ran the International Economic Synthesis Division in the Forecasting Directorate of the French Ministry of Finance. His research focuses on macroeconomics and macroeconomic monitoring. With Nicolas Carnot he co-authored La Prévision Économique, which in 2003 received a prize for best economics book from the French Moral and Political Sciences Academy.

• Foreword by; J.-P. Cotis Introduction First Principles The Data Incoming News and Near-term Forecasting Time Series Methods Modelling Behaviour Macroeconomic Models Medium and Long-run Projections Financial and Commodity Markets Budget Forecasts Sectoral Forecasting Accuracy Using the Forecasts Communication Challenges A Tour of the Forecasting Institutions Epilogue

'Good economic forecasters are pragmatists. They combine intuition, based on experience, with time series evidence, with theory. Forget theory, and you lose internal consistency and become a bad story teller. Be a slave to theory, and you miss important developments because they do not fit. These skills are not taught in graduate school (they should). But they are taught in this remarkable book. Read it before you start forecasting.' - Olivier J. Blanchard, Economics Professor, MIT'Economic Forecasting is accessible to anyone with a general background in economics, yet nuanced and state-of-the-art. It provides the complete toolkit needed by forecasters, with clear presentations of the technicalities and numerous up-to-date real-life exhibits. It vividly shows how economic analysis and decision processes interact.' - Jean-Philippe Cotis, OECD Chief Economist'Speaking as a previous practitioner of this 'dark art' at the Bank of Canada, I found this book both useful and easy to read. Useful, because it reminded me almost effortlessly of many of the complications and pitfalls in forecasting that I once had to learn the hard way. And also useful because its comprehensive and thoroughly up-to-date approach gave me insights that I either never had or were simply not available at the time. As for easy, it is a joy to read a book that is clearly written, logically ordered, and reliant no more than is necessary on mathematical techniques. Striking the right modest tone about economic forecasting - through explicit recognition of natural impediments to foreseeing the future, the problem of conflicting models and indicators, and the ultimate need to exercise good judgement - was for me another of the book's attractive qualities.' - William R. White, Economic Adviser and Head of the Monetary and Economic Department, BIS