December 10th, 2017

Our first Discussion Paper 2017/1 is now available: Benchimol, Jonathan / El-Shagi, Makram: Forecast Performance in Times of Terrorism

Abstract: Governments, central banks, and private companies make extensive use of expert and market-based forecasts in their decision-making processes. These forecasts can be affected by terrorism, which should be considered by decision makers. We focus on terrorism, as a mostly endogenously driven form of political uncertainty, and use new econometric tests to assess the forecasting performance of market and professional in‡flation and exchange-rate forecasts in Israel. We show that expert forecasts are better than market-based forecasts, particularly during periods of terrorism. However, forecasting performance and abilities of both market-based and expert forecasts are signifi…cantly reduced during such periods. Thus, policymakers should be particularly attentive to terrorism when considering in‡flation and exchange-rate forecasts.

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Prof. Dr. Peter Egger

November 11th, 2017

Prof. Dr. Peter Egger joined our team as Senior Fellow. Peter Egger is Professor of Applied Economics at KOF, the Swiss Institute for Business Cycle Research in the Department of Management, Technology and Economics since 2009. In the same year, he became Head of the Division Structural Change and Innovation at KOF. He is the editor of Review of International Economics.

 

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