"When you're building forecasts on a baseline that's shifting, it can be very, very difficult," said Steve Landefeld, the bureau's director, in a phone interview last week.
(At some point, I'll have another post about how economists need to be much more careful about the distinctions between real-time and revised data when they're building forecasting models. But we'll save that for another time).
Other approaches such as the MicroDYN framework distinguish between three types of competences which are necessary to solve complex problems: model building, forecasting, and information retrieval (Wüstenberg et al. 2012).
It is possible — and, in fact, desirable — to take advantage of this property when building a forecast model.
Johnson Controls, a maker of automotive components systems and building controls, forecast a smaller-than-expected profit for the current quarter on Friday because of lower auto production in Europe, setting off a decline of about 3 percent in its share price.
Nationwide, Britain's biggest building society, forecast a 15% rise in house prices this year.The financial regulator of Fannie Mae and Freddie Mac announced that the two American mortgage-finance behemoths were adequately capitalised at the end of 2003 and could withstand a prolonged housing-market slump.
They can't imagine that yields will go back up, either in Japan or the U.S. If Seino is guilty of building a forecast on an extrapolation, he is only doing what others do.
They can't imagine that yields would go back up, either in Japan or the U.S. If Seino is guilty of building a forecast on an extrapolation, he is only doing what others do.
The final step in building the forecasting model is to "reasonalize" the LES forecasts by multiplying them by the appropriate seasonal indices.
