Joint Economic Forecast 2013-2016

The Joint Analysis is prepared by the following institutes or institute consortia:

• ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München e.V. with Konjunkturforschungsstelle der Eidgenössischen Technischen Hochschule, Zürich
• Deutsches Institut für Wirtschaftsforschung, Berlin with Österreichisches Institut für Wirtschaftsforschung, Wien
• Institut für Wirtschaftsforschung Halle with Kiel Economics 
• Rheinisch Westfälisches Institut für Wirtschaftsforschung e. V., Essen, with Institut für Höhere Studien, Wien

Content

Twice a year (in spring and in the autumn) the Ifo Institute collaborates with the other institutes or institute consortia to prepare joint forecasts for the world economy and the German economy. This activity is sponsored by the German Ministry of Finance.

Elements of the forecast

The primary goal is to assess the macroeconomic development in Germany. As the German economy is affected by the world economy and as it is more and more integrated in the European economy, analyses and forecasts are also made for the international environment. The key variables of the forecast for Germany (and for the Euro area) are the growth of real GDP, the main components of the demand side (private consumption, public consumption, equipment investment, construction, exports, imports, changes in stocks) and of supply (productivity, employment) as well as unemployment and inflation rates.

Forecasting period

In the spring report a quarterly forecast is given up to the end of the following year. Given the dates of the publications of the National Accounts this implies forecasting eight quarters. In the autumn report also an estimate for the current and the next year is given on a quarterly basis, which implies forecasting six quarters. In addition, the Joint Analysis also contains a medium-term forecast for developments over the coming five years.

Forecasting approach

For the macroeconomic forecast various methods are used. They include business cycle indicators (indicator approach), the econometric forecast, and the iterative-analytical method. These are not mutually exclusive alternatives but methods that are combined according to the forecasting task and forecasting horizon, making use of the strengths of each.

• In general, the indicator approach is used for short-term, most-current economic forecasts. This concept uses the systematic character of coincident and leading indicators from survey results and/or official statistics. This approach is also used for estimating values for just-concluded calendar periods for which official national accounts data are not yet available. Moreover, they are published at more frequent intervals than national accounts data, usually monthly.
• The iterative-analytical forecast is used for the forecasting period that goes beyond that of the indicator approach. The method relies in particular on national accounts and generates its forecasts in an iterative way, i.e. in a stepwise estimation process. Its particular advantage is that it can use all available qualitative and quantitative material. The iterative-analytical method is thus very flexible in taking account of economic events which in this form or in this strength have not yet occurred in the past. This method requires a well-functioning team of experts that analyse in detail the various demand and supply components of GDP. It is the main forecasting approach in the joint forecast of the institutes.
• The econometric forecast is based on a regression analysis of selected time series variables from economic statistics that are combined in structural models; which can include hundreds of variables. The econometric forecasts are used internally by the institutes to check the results of the iterative approach, and they are also used to quantify the effects of alternative assumptions for the world economy and for economic policies (sensitivity analysis).

Policy recommendations

Based on the macroeconomic analysis and forecast the report also includes recommendations, in particular on fiscal policy, monetary policy, wage-setting policies and structural policies, which are important for macroeconomic development.

Publications on the project

The joint economic forecast will be published in German in the next issue of ifo Schnelldienst.

The short and long versions of the joint economic forecast as well as the accompanying tables can be downloaded from the Website.

• ifo Schnelldienst
• Joint Economic Forecast

Projektgruppe Gemeinschaftsdiagnose, "Aufschwung bleibt moderat – Wirtschaftspolitik wenig wachstumsorientiert", ifo Schnelldienst 69 (08), 2016, 03–59 | PDF Download

Blankart, Charles B., Katharina Gnath, Jörg Haas, Thiess Büttner and Frank Westermann,"Bildung einer Fiskalunion: Ein wirkungsvolles Instrument zur Stabilisierung der Eurozone?", ifo Schnelldienst 68 (20), 2015, 03–16 | PDF Download

Projektgruppe Gemeinschaftsdiagnose, "Kräftiger Aufschwung dank günstigem Öl und schwachem Euro", ifo Schnelldienst 68 (08), 2015, 03–73 | PDF Download

Projektgruppe Gemeinschaftsdiagnose, "Deutsche Wirtschaft stagniert – Jetzt Wachstumskräfte stärken", ifo Schnelldienst 67 (20), 2014, 03–61 | PDF Download

Projektgruppe Gemeinschaftsdiagnose, "Gemeinschaftsdiagnose Frühjahr 2014: Deutsche Konjunktur im Aufschwung – aber Gegenwind von der Wirtschaftspolitik", ifo Schnelldienst 67 (08), 2014, 03–64 | PDF Download

Projektgruppe Gemeinschaftsdiagnose, "Konjunktur zieht an – Haushaltsüberschüsse sinnvoll nutzen", ifo Schnelldienst 66 (20), 2013, 03–60 | PDF Download