As economic reports? Just by the look in the crystal ball? Or with a lot of processing work? Especially the latter. This also applies to the spring report, which will be presented today.
An economic forecast is a gigantic computing task. Snippy, you could also call a large number salad. The most famous variant in Germany is two Times a year, as a “community diagnosis” of several major economic institutions. Their employees are meeting in working groups and at the conclusion of their deliberations is a preview of the coming months, or in the fall to the coming year.
mainly on the value of all the eyes: based on the estimated development of the German economy as a whole. This change in the gross domestic product (GDP) is used by the Federal government for many further calculations. If such should turn out that the expected tax revenues are insufficient to cover the expenditure, would need to be calculated in the Ministry of Finance.
Need to recalculate the Minister of Finance once again? The opinion should provide him with guidelines.
average error in the Zero-point-range
“Neither politics nor businesses like to drive in the fog,” says Christian Odendahl, chief economist of the think-tank Centre for European Reform in Berlin, which is not involved in the community diagnosis. “With such forecasts will be attempted, at least a rough estimation about the economic future.” To make a forecast independently create, be reasonable, the policy “could expect the future is beautiful”.
The exact values taken by the experts in the past few years with their forecasts almost never, but the deviations were lower, as skeptics often claim. In their forecast in April of last year, the Economists of economic growth for 2018 of 2.2 percent. In fact, the gross domestic product rose by only 1.5 percent. Because not all of the necessary individual statistics are available, can change the distance between the forecast and the reality.
error rate: 0.7% points
in 2017, the opposite happened. The forecast saw GDP growth of 1.5 per cent, at the end, it was 2.2 percent. A deviation, which is apparently “typical”: the period from 1995 to 2016, the “mean absolute error” of the community was diagnoses points at 0.7 percent.
The largest prediction errors of the last years related to the financial crisis of 2008/2009. For 2009, the community diagnosis had said in the autumn before a Mini-growth of 0.2 percent advance. In fact with a Minus of 5.6 percent, but at the end of the year 2009.
The appraiser must also take account of possible downward trends in specific industries.
the better the assumptions, so more accurately it can forecast the forecast
advance-then hit, if many of the underlying assumptions prove to be correct. Germany will escape in the summer from the EU? Rather unlikely. The Trends in world trade change, if the tone between US President Donald Trump, and China is harsh? Could happen sooner. The Economists have for different sectors of the economy, their own formulas, for example for imports from abroad or for the public investments of the state.
the price Of Oil on the level of Interest rates or the exchange rate of the Euro to the possible consequences of future laws, the researchers in their formulas need to incorporate as many parameters as you see fit. Although more and more data in the past decades, available. On the other hand, the increasing international interdependence of trade forces, additional variables in the forecasts.
International Integrations, the forecasts difficult.
“ uncertainty understand”
Rüdiger Bachmann is in Economics and teaches in the USA, at Notre-Dame University in Indiana. “Unconditional economic forecasts, à la ’the growth of the GDP this year, X percent’ are to be actually impossible,” he says. “Each such forecast can change the behavior of people and companies so that certain developments to occur much earlier or not at all.”
However, Bachmann has respect for those who create such predictions for a living. “You’re wrong, is in the nature of things”, the economist. “However, it is important that the users of these forecasts understand their uncertainty, as well as the above-mentioned feedback effects.”
“in Spite of all the weaknesses and economic forecasts for the orientation of the economy and in politics, remain essential,” writes the Munich-based IFO Institute, and the diagnoses to the circle of the Community-the Creator belongs to, in a recent analysis. Economic researchers were prophets, neither “a psychic”, but they could help to reduce the uncertainty of companies and politicians.
Atlas |Germany |Cologne
