Making accurate predictions about the economy has always been difficult, but today forecasters have to contend with increasing complexity and unpredictable feedback loops. However, forecasting has a huge role in helping to better understand and prepare for the challenges of tomorrow.
Professor Sir David Hendry, Director, Program in Economic Modeling, Institute for New Economic Thinking at the Oxford Martin School, and collaborators Dr Jennifer Castle, and Professor Michael Clements have set out to present the subject of forecasting in a simplified and accessible way in their recently released book Forecasting: An Essential Introduction.
It is unique for omitting mathematics and technical descriptions while retaining the subtleties and complexities of the concepts which are key to truly understanding forecasting. Many of the forecasts that people make in their daily lives, like what time to leave home to catch a flight, have parallels in economic forecasting, and the book focuses on real-world examples to help the reader better understand the more abstract scientific approach.
Endorsing the book, Mark Zandi, Chief Economist of Moody’s Analytics and author of Financial Shock and Paying the Price said "It’s a topsy-turvy world, but we all must have a view on where it is headed: from the business owner hiring a new employee to the renter becoming a homeowner. Of course, there are accurate forecasts and off-base ones. Forecasting may not turn you into Warren Buffet but it will ensure you avoid a forecasting blunder."
The book is written to be an ideal starting point for students, for practitioners new to the field and for general readers interested in how economists forecast.