- Involves the application of statistical and mathematical models to forecast future developments in the economy. Econometric forecasting allows economists to review past economic trends and forecast how recent economic changes will alter the patterns of past trends.
What Are The Advantage of Econometric Forecasting?????
- A major advantage with econometric forecasting is that it explicitly allows for the impact on the forecast variable of changes in determining forces. The process involves estimating the quantitative relationship between the forecast variable and explanatory variables , and then inserting forecasts of the influencing variables into the estimated relationship.