Advances in Economic Forecasting

Finds that the economics profession, including those who specialize in economic forecasting, missed predicting one of the greatest economic downturns in recent times, the "Great Recession." With the wealth of data sources and sophisticated statistical modeling techniques at their disposal, questions why could these specialists have whiffed? Presents six chapters that focus on how the reliability of economic forecasts can be improved. Three of the chapters focus on forecasting in real time while predicting turning points for macro aggregate measures such as Gross Domestic Product, inflation, growth, and unemployment. Two chapters argue that data can be more efficiently exploited through model and forecast combination. They, along with the authors of another chapter, also advocate for using models that are adaptive and perform well in the presence of nonlinearity and structural change.