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dc.contributor.advisorBraithwaite, Jeanine D.
dc.contributor.authorHowrey, Mark M.
dc.descriptioniii, 39 p.en_US
dc.description.abstractMany times economic forecasts are used as arguments for a change in a monetary policy or a basis for decisions by business people. The majority of modelers do not release a measure of accuracy of the predictions. This leaves the question of how good have the predictions been in the past. It was found that prediction intervals using a 95 percent level of confidence were large enough to put their use into question for three macroeconomic variables: the growth in real GNP, inflation, and the unemployment rate. The prediction intervals calculated were over a fourteen year period. This left the question of when the errors were the greatest. It was hypothesized that the errors in prediction would be large for forecasts made in peaks and troughs. This is due to the fact that during these times economic activity does not continue to increase or decrease, but changes direction faster than the trend. It was discovered that the errors of predictions made in peaks or troughs were not necessarily greater than the mean error and that large errors could have been caused by a range of events. Finally, the relationship between the dispersion of forecasts and the associated error was considered. If a relationship were found, the people who use the forecasts could know the level of confidence which should be placed in a prediction if a given dispersion were witnessed. Unfortunately, it was found that there is no clear relationship between the two.en_US
dc.relation.ispartofKalamazoo College Economics and Business Senior Individualized Projects Collection
dc.rightsU.S. copyright laws protect this material. Commercial use or distribution of this material is not permitted without prior written permission of the copyright holder.
dc.titleModel Accuracy: Average, Over Time, and Its Relationship with Dispersionen_US
KCollege.Access.ContactIf you are not a current Kalamazoo College student, faculty, or staff member, email to request access to this thesis.

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  • Economics and Business Senior Individualized Projects [1145]
    This collection includes Senior Individualized Projects (SIP's) completed in the Economics and Business Department. Abstracts are generally available to the public, but PDF files are available only to current Kalamazoo College students, faculty, and staff.

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