Isabel Backes

  School of Business and Economics | Bachelor Economics and Business Economics

Evaluation of Gross Value Added Forecasts from German Research Institutes-The Value of Expert Collaboration

Isabel's elevator pitch
Accurate economic forecasts are essential for informed decision-making by both private and public actors, shaping investment strategies, budget planning, and policy design. Their value is particularly pronounced when forecasts target specific sectors, since shocks affect manufacturing, services, and construction in distinct ways. This thesis combines qualitative and quantitative elements. Expert interviews with German economic research institutes uncover differences in forecasting methodologies, including model selection and judgmental adjustments in sectoral projections. The quantitative analysis evaluates forecast performance and compares individual institute forecasts with the Joint Economic Forecast as a collaborative benchmark. I show that collaboration improves forecast accuracy in periods of high volatility such as during COVID-19 when purely mechanical models fail to capture new and rapidly evolving dynamics.