What do you do if you're unsure how to choose the right economic forecasting tool for your work?

1 Define your purpose

The first step in choosing the right economic forecasting tool is to define your purpose. What are you trying to forecast, and why? What are the key variables, indicators, or scenarios that you are interested in? How will you use the forecast results, and who are your intended audience? Answering these questions will help you narrow down your scope, focus, and criteria for selecting the best tool for your work. For example, if you are forecasting the GDP growth of a country, you may want to use a tool that incorporates macroeconomic models, national accounts data, and policy assumptions. On the other hand, if you are forecasting the demand for a specific product, you may want to use a tool that captures consumer behavior, market trends, and competitive factors.

3 Compare your options

The third step in choosing the right economic forecasting tool is to compare your options. What are the different tools or methods that you can use to forecast your economic variable or outcome of interest? What are the advantages and disadvantages of each option, and how do they align with your purpose and data? How do you evaluate the performance, robustness, and sensitivity of each option, and how do you communicate the uncertainty and confidence of your forecasts? To compare your options, you may need to do some research, experimentation, or testing to find the best fit for your work. For example, you may want to compare the results of different tools or methods using the same data set, or use a tool that allows you to combine or compare multiple methods, such as ensemble or hybrid forecasting.

4 Consider your resources

The fourth step in choosing the right economic forecasting tool is to consider your resources. What are the time, budget, and skills constraints that you face in your work? How do they affect your choice of tool or method, and how can you overcome or mitigate them? How do you balance the trade-off between complexity and simplicity, or between accuracy and feasibility, in your forecasting process? To consider your resources, you may need to prioritize, optimize, or adapt your tool or method to suit your work context and needs. For example, if you have a tight deadline, you may want to use a tool that is easy to use, fast to run, and flexible to update. However, if you have more time and resources, you may want to use a tool that is more sophisticated, comprehensive, and rigorous.

5 Review your results

The fifth step in choosing the right economic forecasting tool is to review your results. How do you validate, verify, and refine your forecasts, and how do you incorporate feedback, new information, or changing conditions? How do you present, explain, and justify your forecasts, and how do you address the potential challenges, questions, or criticisms that may arise? How do you monitor, track, and update your forecasts, and how do you learn from your successes and failures? To review your results, you may need to use various tools or techniques to check, improve, and communicate your forecasts, such as backtesting, cross-validation, error analysis, sensitivity analysis, visualization, or storytelling.

6 Learn from others

The sixth step in choosing the right economic forecasting tool is to learn from others. How do you benchmark, compare, or collaborate with other forecasters, experts, or stakeholders in your field or domain? How do you leverage the best practices, insights, or innovations from other sources or disciplines? How do you keep up with the latest trends, developments, or opportunities in economic forecasting? To learn from others, you may need to use various tools or platforms to access, share, or discuss your forecasts, such as databases, reports, journals, blogs, podcasts, webinars, or forums.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?