What is the world economy based on
1. Term: Conditional forecast of the course of future economic development. An economic forecast is based on the economic diagnosis and regularities in the course of the economy, the occurrence of which can also be expected with a certain degree of reliability in the future. It is both theoretically and empirically founded and is based on certain assumptions (e.g. about the future course of domestic economic policy, the further development of exchange rates, the economy abroad, etc.).
2. Subject of The economic forecast is the set of figures from the national accounts (VGR), which gives a consistent overall picture of the economic situation. Individual variables that deserve particular attention in the context of the economic forecast are the rates of change in real gross domestic product, private consumption, investments, exports and imports, prices, income and employment.
3. The time horizon of Economic forecast covers up to six or eight quarters. The public particularly takes note of those economic forecasts that are issued at the end of the current calendar year for the following calendar year.
4. goal of Economic forecasting is above all to forecast the turning points in the cycle and the strength of the economic fluctuations, and to show the course with which monetary, financial, social and wage policy can be used to prevent major deviations from the macroeconomic goals . The forecast of the turning points is one Timing forecast; it is therefore much more difficult and also less precise than the usual period forecast, which makes a statement about the economic development over a longer period of time.
5. Procedure: For the short-term economic forecast (up to a quarter) have extrapolative procedures, which record certain regularities of the time series to be forecast in the past have proven to be quite useful (time series analysis). The traditional economic forecast is mainly based on suitable ones Business indicatorsthat are ahead of the economic activity. However, economic indicators only allow qualitative economic forecasts. Econometric models on the other hand, allow quantitative estimates of both the economic trend and, for example, the probabilities with which, for example, a recession is to be expected. In addition to very strongly disaggregated models (200 and more equations), highly aggregated models are also used.
6. Practice: a) In the practical economic forecast mostly all of the described ones can be found Procedure simultaneous application. Forecast values for the most important variables of the national accounts (VGR) are mostly in one iterative process created. First, the variables that have already been largely determined (e.g. future government spending based on a budget that has already been approved) and exogenous variables (see variable, exogenous) are compiled. A first estimate of the demand and distribution calculation is then made. The feedback effects are then taken into account until a consistent estimate of all variables in the system has been achieved.
b) Publications: The major economic research institutes in Germany and the Expert Council for the Assessment of Overall Economic Development (SVR) regularly publish economic forecasts. These are created using econometric models, among other things, and they are also included in the joint diagnosis of these institutes. Economic forecasts for the world economy are drawn up by the OECD and the International Monetary Fund (IMF), among others.
7. Evaluation: Nobody can know for sure what will happen in the future. Economic forecasts must therefore inevitably show forecast errors. These can be based on
(1) an incorrect specification of the forecast model,
(2) wrong assumptions about the exogenous variables,
(3) exogenous disruptions (e.g. oil price shock, debt crisis) and
(4) a revision of the statistical data on which the estimate is based. The quality of economic forecasts is controversial among the public. The most reliable are those economic forecasts that have emerged from the iterative interaction of experts and econometric forecasting models.
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