The Unassuming Economist

Venue: University of North Carolina at Charlotte | 3 & 4 March 2025

The Foresight Practitioner Conference (FPC) brings together preeminent forecasting practitioners and business leaders to network, learn, and explore emerging and cutting-edge aspects of forecasting. The conference focuses on collaborating and improving forecast practice by showcasing businesses, subject matter experts, and organizations that significantly impact value. The conference is hosted by the International Institute of Forecasters (IIF) and includes the first-annual IIF Practice Competition.

Mark your calendar for ISF 2025! Beijing, China | June 29 – July 2 IIF is now accepting abstract submissions for ISF 2025 ~ Visit their website for more information., For more information on Keynote Speakers, venue, lodging and social activities, go to the ISF website. If you have any questions, contact them at isf@forecasters.org.

From a paper by Belen Chocobar, Peter Claeys, and Marcos Poplawski-Ribeiro:

“Macroeconomic theories attribute rigidities in expectations formation to two mechanisms: sticky or noisy information. Recent advances in testing time variations in forecast dispersion—using the fluctuation rationality test—allow detecting departures from forecaster rationality over time. Relating individual forecaster behavior to economic or political factors on a panel of budget balance forecasts from Consensus Economics, a large panel of individual expert forecasters in four major OECD countries between 1993 to 2023, we find evidence for forecaster behavior in line with noisy information. Traditional full-sample tests show that forecasters are not rational, but this is due to an overly pessimistic reaction to sudden big shifts, like the global financial crisis or the pandemic. In normal times, forecasters do systematically incorporate economic and political news in budget forecast revisions.”

From a paper by Bertrand Candelon and Francesco Roccazzella

“This paper evaluates the informative value of the ECB inflation forecasts vis-à-vis other institutional and model-based forecasts in the euro area using ex post optimal combinations of forecasts and nonnegative weights. From a methodological perspective, we adapt the corresponding forecast encompassing test to the constrained parameter space, showcasing its superior performance over traditional encompassing tests in both size and power properties. Empirically, the combining weights and the forecast encompassing test reveal that the ECB was the most informative forecaster of euro area inflation over the 2009–2021 period. This changed in 2022: The ECB lost its position as the most informative forecaster, and when using rolling windows to estimate the combining weights using a rolling window, we find an important decline in the ECB’s weight over time. This time dependency can be associated with the economic environment and, in particular, the level of uncertainty, the monetary policy, and the macro-financial conditions in which the ECB operates.”

From a paper by Oguzhan Cepni, Abdullah Kazdal, Muhammed Enes Olgun, and Muhammed Hasan Yilmaz:

“This paper investigates whether inflation forecasting in emerging economies can be improved with the inclusion of a global inflation component. Focusing on the headline inflation rate of Türkiye, we implement a forecasting exercise using a large dataset describing domestic macroeconomic as well as global inflation dynamics. Our factor-augmented predictive regression results show that incorporating global inflation factors derived from other emerging markets’ inflation rates enhances forecasting accuracy of the local headline inflation rate. The results are robust to using alternative dimension-reduction methods, including the elastic net technique. Our findings contribute to the current methodological toolkit available to policymakers for predicting inflation in an emerging market context.”