Title
Assessing the historical accuracy of regional economic forecasts
Publication Date
1-1-1996
Publication Name
Journal of Forecasting
Volume
15
Issue
1
First Page
19
Last Page
36
Source Full Text URL
https://doi.org/10.1002/(SICI)1099-131X(199601)15:1<19::AID-FOR602>3.0.CO;2-B
Document Type
Article
DOI
10.1002/(SICI)1099-131X(199601)15:1<19::AID-FOR602>3.0.CO;2-B
Abstract
This study addresses for the first time systematic evaluation of a widely used class of forecasts, regional economic forecasts. Ex ante regional structural equation model forecasts are analysed for 19 metropolitan areas. One- to ten-quarter-ahead forecasts are considered and the seven-year sample spans a complete business cycle. Counter to previous speculation in the literature, (1) dependency on macroeconomic forecasting model inputs does not substantially erode accuracy relative to univariate extrapolative methodologies and (2) stochastic time series models do not on average, yield more accurate regional economic predictions than structural models. Similar to findings in other studies, clear preferences among extrapolative methodologies do not emerge. Most general conclusions, however, are subject to caveats based on step-length effects and region-specific effects.