Fed paper finds ways to boost forecast performance
Adding extra information can help make forecasts more accurate and robust, authors say
A study published by the Federal Reserve finds adding extra information can improve forecasts, even though simple models remain “hard to beat”.
The working paper Forecasting US inflation in real time explores highlights how “careful introduction” of additional information can make forecasts more accurate and more robust.
Chad Fulton and Kirstin Hubrich test whether additional macroeconomic variables, expert judgement or forecast combinations can improve projections of headline personal
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