Blogging the Bookshelf

Blogging my bookshelf – one book at a time

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Entries Tagged as 'Economic Modelling'

Markets for Predicting Macro-Economic Variables – “The Signal and the Noise: The Art and Science of Prediction”, Nate Silver

November 20th, 2012 · Comments Off on Markets for Predicting Macro-Economic Variables – “The Signal and the Noise: The Art and Science of Prediction”, Nate Silver · Economics, Policy, Prediction

One of the most basic applications might simply be markets for predicting macroeconomic variables like GDP and unemployment. There are already a variety of direct and indirect ways to bet on things like inflation, interest rates, and commodities prices, but no high-volume market for GDP exists. There could be a captive audience for these markets: […]

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The Limitations of Economic Forecasts – “The Signal and the Noise: The Art and Science of Prediction”, Nate Silver

November 19th, 2012 · Comments Off on The Limitations of Economic Forecasts – “The Signal and the Noise: The Art and Science of Prediction”, Nate Silver · Economics, Policy, quote

Instead, economic forecasts are blunt instruments at best, rarely being able to anticipate economic turning points more than a few months in advance. Fairly often, in fact, these forecasts have failed to “predict” recessions even once they were already under way: a majority of economists did not think we were in one when the three […]

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Overfit Models – “The Signal and the Noise: The Art and Science of Prediction”, Nate Silver

November 19th, 2012 · Comments Off on Overfit Models – “The Signal and the Noise: The Art and Science of Prediction”, Nate Silver · Modelling, Quotes, Statistics

But the overfit model scores those extra points in essence by cheating—by fitting noise rather than signal. It actually does a much worse job of explaining the real world. As obvious as this might seem when explained in this way, many forecasters completely ignore this problem. The wide array of statistical methods available to researchers […]

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