Forecast Errors And Financial Developments

Topics:
Financial Research
Tags:
Bank For International Settlements,
Currency & Foreign Exchange,
Error,
Finance,
Financial,
Financial Accounting
Source:
Bank for International Settlements

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Overview: This paper looks at the accuracy of forecasts and, more specifically, addresses the question whether forecasts of growth and inflation can be improved by including information from financial markets. The empirical work presented suggests that average forecast errors are not large enough to seriously undermine the basis for forward-looking monetary policies, except in periods of common shocks and at cyclical turning points. It also appears that unexpected changes in non-financial variables are the primary source of forecast errors.

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Format: PDF | Size: 380KB | Date: Nov 1997 | Pages: 61


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