Using Consensus Modeling to Formulate a More Accurate Economic Forecast
Open Access
Author:
Dau, Nicholas Michael
Area of Honors:
Economics
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
Andres Aradillas Lopez, Thesis Supervisor Dr. Russell Paul Chuderewicz, Thesis Honors Advisor
Keywords:
forecasting economics GDP CPI inflation interest rates consensus
Abstract:
This paper looks to forecast GDP growth, CPI change and 10-Year Treasury note interest rates through a consensus forecasting model. The consensus model takes into account 50-60 forecasts available from the Blue Chip Economic Indicators survey. The model differs from mainstream forecasts in that it assigns probabilities for each economic outcome, and supplements this with a broad 99% confidence interval. Ultimately the model performs best for current year CPI change and GDP growth to a lesser degree. The model struggles to provide precise and accurate forecasts for the long-term GDP, CPI and interest rate forecasts.
