Is a more liberal approach to conservatism needed in forecasting?

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Abstract

I discuss evidence that supports several of the principles put forward in the paper by Armstrong, Green, and Graefe (AGG), but argue that the packaging of these principles as a single “golden rule”’ and the use of the term “conservative” may lead to misunderstandings. Additional work should be carried out to investigate the extent to which these principles should be applied to probability and interval forecasts. Finally, good reasons may support why “rational” forecasters behave in ways that are inconsistent with the guidelines AGG provide in their golden-rule checklist.
Original languageEnglish
Pages (from-to)1753-1754
JournalJournal of Business Research
Volume68
Issue number8
DOIs
Publication statusPublished - Aug 2015

Keywords

  • forecasting, conservatism, probability forecasts, prediction intervals.

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