Output Expectations and Forecasting of UK Manufacturing |
| |
Authors: | David Bywaters Gareth Thomas |
| |
Institution: | (1) Accounting, Finance and Economics, University of Hertfordshire, Business School, de Haviland Campus, Hatfield, Hertfordshire, AL10 9AB, UK |
| |
Abstract: | This paper analyses both quarterly data from the Confederation of British Industry (CBI) Survey on respondents’ expectations
of recent and forthcoming manufacturing output and monthly Office of National Statistics (ONS) figures on actual manufacturing
output within the UK. Quarterly output expectations of the CBI manufacturers are explained from the monthly ONS observations
using a bounded rationality approach. The logistic formulation models the diffusion process across respondents. There is a
backward-looking CBI Survey perspective, explained by past ONS observations, and a forward-looking perspective, explained
from future ONS statistics. Also, the forecasting of monthly manufacturing output from earlier values, along with the quarterly
CBI Survey information, is examined and tested against the alternative Pesaran/Thomas method. The study provides econometric
evidence for the validity of the logistic model and shows that bounded rationality can explain the formation of predictions
among business managers in the UK manufacturing sector. The emerging consensus from the literature, supported by this paper,
is that the logistic format is a superior approximation to the true data generating process compared with the earlier standard
Anderson/Pesaran/Thomas approach. An adjustment to the Survey is used, which achieves perfect symmetry with up and down versions
of the data. The benefits of this adjustment are tested in the forecasting section.
|
| |
Keywords: | Manufacturing Output Expectations Forecasting Logistic Bounded Rationality |
本文献已被 SpringerLink 等数据库收录! |
|