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Acknowledging Uncertainty in Economic Forecasting. Some Insight from Confidence and Industrial Trend Surveys

The role of uncertainty has become increasingly important in economic forecasting, due to both theoretical and empirical reasons. Although the traditional practice consisted of reporting point predictions without specifying the attached probabilities, uncertainty about the prospects deserves increas...

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Autores principales: López-Menéndez, Ana Jesús, Pérez-Suárez, Rigoberto
Formato: Online Artículo Texto
Lenguaje:English
Publicado: MDPI 2019
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7514903/
https://www.ncbi.nlm.nih.gov/pubmed/33267127
http://dx.doi.org/10.3390/e21040413
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author López-Menéndez, Ana Jesús
Pérez-Suárez, Rigoberto
author_facet López-Menéndez, Ana Jesús
Pérez-Suárez, Rigoberto
author_sort López-Menéndez, Ana Jesús
collection PubMed
description The role of uncertainty has become increasingly important in economic forecasting, due to both theoretical and empirical reasons. Although the traditional practice consisted of reporting point predictions without specifying the attached probabilities, uncertainty about the prospects deserves increasing attention, and recent literature has tried to quantify the level of uncertainty perceived by different economic agents, also examining its effects and determinants. In this context, the present paper aims to analyze the uncertainty in economic forecasting, paying attention to qualitative perceptions from confidence and industrial trend surveys and making use of the related ex-ante probabilities. With this objective, two entropy-based measures (Shannon’s and quadratic entropy) are computed, providing significant evidence about the perceived level of uncertainty. Our empirical findings show that survey’s respondents are able to distinguish between current and prospective uncertainty and between general and personal uncertainty. Furthermore, we find that uncertainty negatively affects economic growth.
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spelling pubmed-75149032020-11-09 Acknowledging Uncertainty in Economic Forecasting. Some Insight from Confidence and Industrial Trend Surveys López-Menéndez, Ana Jesús Pérez-Suárez, Rigoberto Entropy (Basel) Article The role of uncertainty has become increasingly important in economic forecasting, due to both theoretical and empirical reasons. Although the traditional practice consisted of reporting point predictions without specifying the attached probabilities, uncertainty about the prospects deserves increasing attention, and recent literature has tried to quantify the level of uncertainty perceived by different economic agents, also examining its effects and determinants. In this context, the present paper aims to analyze the uncertainty in economic forecasting, paying attention to qualitative perceptions from confidence and industrial trend surveys and making use of the related ex-ante probabilities. With this objective, two entropy-based measures (Shannon’s and quadratic entropy) are computed, providing significant evidence about the perceived level of uncertainty. Our empirical findings show that survey’s respondents are able to distinguish between current and prospective uncertainty and between general and personal uncertainty. Furthermore, we find that uncertainty negatively affects economic growth. MDPI 2019-04-18 /pmc/articles/PMC7514903/ /pubmed/33267127 http://dx.doi.org/10.3390/e21040413 Text en © 2019 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (http://creativecommons.org/licenses/by/4.0/).
spellingShingle Article
López-Menéndez, Ana Jesús
Pérez-Suárez, Rigoberto
Acknowledging Uncertainty in Economic Forecasting. Some Insight from Confidence and Industrial Trend Surveys
title Acknowledging Uncertainty in Economic Forecasting. Some Insight from Confidence and Industrial Trend Surveys
title_full Acknowledging Uncertainty in Economic Forecasting. Some Insight from Confidence and Industrial Trend Surveys
title_fullStr Acknowledging Uncertainty in Economic Forecasting. Some Insight from Confidence and Industrial Trend Surveys
title_full_unstemmed Acknowledging Uncertainty in Economic Forecasting. Some Insight from Confidence and Industrial Trend Surveys
title_short Acknowledging Uncertainty in Economic Forecasting. Some Insight from Confidence and Industrial Trend Surveys
title_sort acknowledging uncertainty in economic forecasting. some insight from confidence and industrial trend surveys
topic Article
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7514903/
https://www.ncbi.nlm.nih.gov/pubmed/33267127
http://dx.doi.org/10.3390/e21040413
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