We analyze the narratives that accompany the numerical forecasts in the Bank of England’s Inflation Reports. We focus on whether the narratives contain useful information about the future course of key macro variables over and above the point predictions, in terms of whether the narratives can be used to enhance the accuracy of the numerical forecasts. We also consider whether the narratives ar...

This paper uses forecast combination methods to forecast output growth in a seven-country quarterly economic data set covering 1959–1999, with up to 73 predictors per country. Although the forecasts based on individual predictors are unstable over time and across countries, and on average perform worse than an autoregressive benchmark, the combination forecasts often improve upon autoregressive...

This paper presents an empirical exercise in economic forecast using traditional time series methods, such as ARIMA and unobservable components models (UCM), and artificial neural networks (ANN). We use monthly gross industrial output data for the state of Rio Grande do Sul (Brazil) to perform a comparative exercise and access the relative performance of the different forecasting methods. The r...

This article provides a simple shrinkage representation that describes the operational characteristics of various forecasting methods designed for a large number of orthogonal predictors (such as principal components). These methods include pretest methods, Bayesian model averaging, empirical Bayes, and bagging. We compare empirically forecasts from these methods with dynamic factor model (DFM)...

This paper investigates forecasts of US in#ation at the 12-month horizon. The starting point is the conventional unemployment rate Phillips curve, which is examined in a simulated out-of-sample forecasting framework. In#ation forecasts produced by the Phillips curve generally have been more accurate than forecasts based on other macroeconomic variables, including interest rates, money and commo...

This chapter introduces the reference scenarios developed by the three modeling groups. These scenarios are plausible future paths, not predictions, for by the very nature of their construction they lack the features of predictions or best-judgment forecasts. For example, they assume that in the post-2012 period existing measures to address climate change expire and are never renewed or replace...