Economic Forecasting for Management: Possibilities and Limitations

Before future-oriented information can be used as a basis for decision making in economics or business administration, it must be understood on a methodological level. This book offers decision makers an understanding of the possibilities offered by various forecasting methods as well as their limitations. If managers rely on a forecast with a long-term perspective to guide them in making short-term decisions, planning deficiencies will likely result. Likewise, if managers use short-term forecasts to inform their long-term strategic vision, failure could easily ensue. Graf provides the tools necessary to sidestep the common pitfall of using the wrong forecasting technique for the wrong purpose. This is not a detailed examination of the mathematical and statistical tools of empirical economic research. Instead, forecasting methods are explained so that they can be understood by the managers who employ them in their decision making. Graf demonstrates that understanding and - in special cases - cooperation between forecast developers and users is crucial to creating an effective forecast that results in informed management decisions. He discusses traditional, long-term, macroeconomic, and global economic forecasting; the scenario technique as a central instrument of long-term forecasting; and short-term economic and market forecasting.