A Review of Economic Forecasting
Prediction is very difficult, especially if it's about the future. (Nils Bohr, Nobel Laureate in Physics) Forcasting is a very difficult task indeed. Take exchange rates, as an example: forecasting exchange rates is not an easy task. It is unclear whether economic models are useful at all in forecasting exchange rates; when they are, the predictive content of economic predictors appears sporadically and erratically Rossi, (2013). How do we evaluate the forecasting ability of…