Forecasting

Concept Identification and a Brief Review of Practices

The rapid expansion of economic forecasting during the twentieth century is mainly the result of the development of statistics and the publication of John Maynard Keynes's general theory in 1936. Moreover, the emergence of globalized economies and societies has added complexity and interdependence to the economic system and has favored some forecasting aspirations that attempt to overcome uncertainty regarding the capability of the states to face up to economic upheaval.

To manage economic policy as well as to prepare and execute public budgets, governments have understood that they should take advantage of expertise in economic forecasting. Based on model building (structural, Keynesian, statistics, econometrics) or on economic trend survey, economic forecasting is based on strict scientific methodologies that distinguish it from the divinatory estimations suggested by clair-voyants or other fortune-tellers. Thus, this wide range of instruments permits forecasters to establish several short-term growth scenarios, generally for the next two years.

In several countries, the places and the levels where forecasting is practiced are fragmented: public administrations, essentially through specialized services of the ministry in charge of finances; autonomous research institutes and expert commissions reporting to the government; and economic services of the banking and financial sector.

In France, the weight that the administration represents within the forecasting function is clearly identifiable and significative (Institut National de la Statistique et des Études Économiques and Direction de la prévision et de l'analyse au Ministère de l'Economie). In the United Kingdom

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