What is it about?

Business and consumer tendency surveys are an essential tool for gathering information about different economic variables. The fast availability of the results and the wide range of variables covered have made them very useful for monitoring the current state of the economy. The objective of this paper is to analyse the possibility of improving forecasts for selected macroeconomic variables for the euro area using the information provided by these surveys.

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Why is it important?

We present a new method to quantify survey results. We test if these indicators provide useful information for improving forecasts of the macroeconomic variables. We use AR, ARIMA, SETAR, VAR and Markov switching regime models to obtain forecasts for the selected macroeconomic variables. We find that in most cases, models that include information from tendency surveys provide better forecasts than the best model without survey information. However, this reduction is only significant in a limited number of cases.


This study proposes a new method to quantify survey expectations and shows that business and consumer surveys help to explain the behaviour of macroeconomic variables

Oscar Claveria
AQR-IREA, Univeristy of Barcelona

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This page is a summary of: Business and consumer expectations and macroeconomic forecasts, International Journal of Forecasting, January 2007, Elsevier, DOI: 10.1016/j.ijforecast.2006.04.004.
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