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Economic Forecasting and Policy 2nd ed. 2011 Edition

5 out of 5 stars 2 customer reviews
ISBN-13: 978-0230243224
ISBN-10: 0230243223
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Product Details

  • Paperback: 495 pages
  • Publisher: Palgrave Macmillan; 2nd ed. 2011 edition (July 26, 2011)
  • Language: English
  • ISBN-10: 0230243223
  • ISBN-13: 978-0230243224
  • Product Dimensions: 6 x 1.2 x 9.7 inches
  • Shipping Weight: 1.7 pounds (View shipping rates and policies)
  • Average Customer Review: 5.0 out of 5 stars  See all reviews (2 customer reviews)
  • Amazon Best Sellers Rank: #672,849 in Books (See Top 100 in Books)

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Now more than ever, economists, policy makers, and businessmen need to be able to form forecasts of key economic aggregates--or at least be able to critically appraise forecasts of official institutions and private think tanks. Economic Forecasting and Policy (Second Edition) is the perfect book for the task. Written lucidly and intelligently by three well-known economists from the French Treasury, the OECD, and the BIS (one of the few institutions to have "called" the 2008-09 global financial crisis), this book provides both underlying theory and much practical advice.
After an overview of business cycle analysis, Carnot, Koen and Tissot delve into the main building blocks of aggregate time series: on the "real" side, consumption, investment, external balance, employment, and wages and prices; on the financial side, monetary policy and its transmission, macro-financial linkages, and asset prices (bonds, stocks, exchange rates). These are truly superb, covering a lot of technical material in an accessible way. Of particular relevance to recent events in the United States, Europe, and Japan, is the chapter on public finances; this is must-reading for anyone trying to make sense of the fiscal policy debates in advanced economies today. After going through the various building blocks, the book gets into forecast risks and accuracy, which is intimately linked to the use to which the forecast will be put (discussed in the final chapter). Here the authors' experience in both making and (more importantly) using forecasts is evident, and the discussion is balanced and intelligent. Three useful (though more technical) annexes describe the data used for major macroeconomic forecasts, time series econometric methods, and macro models.
Overall, a thoroughly enjoyable book by three authors who clearly know what they are writing about. Highly recommended for students, policy makers, and practioners alike. I will recommend it to my colleagues and likely assign it to my MBA students.
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Format: Paperback
"Economic Forecasting and Policy: Second Edition" is a must-read for analysts working with macroeconomic issues and forecasting in the private sector, government or international organizations. Indeed it could prove useful for users of forecasts too, such as politicians, corporate leaders and journalist. It is clearly written, fairly untechnical and provides lot's of practical examples in included boxes. This is a book written by practitioners for practioners.

What makes this book, and its' predecessor, so valuable is that is written as a "cookbook" for forecasters, whereas most books on economic forecasting take their departure mainly from economic theory and econometric models. The latter are important tools for good forecasting, but they are not nearly sufficient as any forecaster worth their salt will tell you. As a manager of forecasting teams, I've found the predecessor of this book extremely useful when helping well-trained but unexperienced economists into the forecasting business.

The book is organized around the main building blocks of forecasting: interpreting and analyzing incoming data, simple economic models of the real economy, the financial sector etc. The first five chapters roughly covers what you need to know for doing economic forecasting, while the remaining three deals with issues like long-term forecasts, risk and policy making that perhaps is more gauged towards practitioners working in the public sector. Finally, there are three annexes dealing with more technical issues like time series methods.

For those that have read the first edition, the most obvious difference is that it is significantly longer. In terms of content the financial sector gets a much more thorough treatment, which is very useful (but not surprising!).
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