Transparency and Forecasting: The Impact of Conditioning Assumptions on Forecast Accuracy
Katja Heinisch, Christoph Schult, Carola Stapper
Applied Economic Letters,
forthcoming
Abstract
This study investigates the impact of inaccurate assumptions on economic forecast precision. We construct a new dataset comprising an unbalanced panel of annual German GDP forecasts from various institutions, taking into account their underlying assumptions. We explicitly control for different forecast horizons to reflect the information available at the time of release. Our analysis reveals that approximately 75% of the variation in squared forecast errors can be attributed to the variation in squared errors of the initial assumptions. This finding emphasizes the importance of accurate assumptions in economic forecasting and suggests that forecasters should transparently disclose their assumptions to enhance the usefulness of their forecasts in shaping effective policy recommendations.
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A Helping Hand, but not a Lift. EU Cohesion Policy and Regional Development
Eva Dettmann, Sarah Fritz
IWH Discussion Papers,
No. 18,
2025
Abstract
This study provides new evidence on the impact of the EU Cohesion Policy on income growth in less developed regions. Our panel includes data from all European regions for the years 1989-2020. Using a fuzzy Regression Discontinuity Design, we model treatment dynamics by applying a random effects estimator. Based on digitized historical data, we precisely replicate the policy rule and correctly classify the regions’ eligibility status. Results show that the policy has a moderate positive effect on GDP per capita growth in the targeted regions.
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10th Vintage
The CompNet 10th Vintage Dataset 10th Vintage dataset is now available! The CompNet dataset provides a comprehensive set of micro-aggregated indicators, specifically designed to…
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9th vintage
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3rd FINPRO - Finance and Productivity Conference
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Virtual Conference on Sustainable development, firm performance and competitiveness policies in small open economies
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8th CompNet Annual Conference
From Micro to Macro: Market Power, Firms’ Heterogeneity and Investment 8th Annual Conference of CompNet, jointly organized with IMF, EIB, ENRI and IWH, March 18-19 2019, European…
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7th vintage
7th Vintage CompNet Dataset The CompNet dataset includes a set of micro-aggregated indicators to enhance policy and academic analysis on competitiveness and productivity. All the…
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