Incorporating Market Information Into the Construction of the Fan Chart

Kannan, Prakash; Elekdağ, Selim

doi:10.5089/9781451873252.001

Cited by 7 publications

(15 citation statements)

References 7 publications

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“…In order to calculate the degree of uncertainty and balance of risks of global growth forecasts from the selected risk factors, a number of assumptions are needed regarding the functional form of their respective distributions, as well as the weight given to individual risk factors. In line with other authors Sellin 1998 andKannan andElekdag 2009), a two-piece normal distribution is used to characterize both global growth forecasts and individual risk factors. 8 The uncertainty and balance of risks (measured by the dispersion and skewness) of global growth forecasts is recovered from the corresponding statistics of the distribution of the three risk factors, assuming a linear relationship between them.…”

Section: Risk Indicators and Global Growthmentioning

confidence: 86%

“…To characterize the evolution of uncertainty around global growth forecasts, a similar approach to that proposed by Blix and Sellin (1998) and Kannan and Elekdag (2009) is used. More specifically, changes in the degree of uncertainty (dispersion) and balance of risks (skewness) of underlying risk factors are used to assess the potential size and direction of forecast errors at any point in time.…”

Section: Risk Indicators and Global Growthmentioning

confidence: 99%

“…This approach provides a useful illustration to discuss forecast uncertainty, but depends heavily on individual model properties and scenario assumptions. Kannan and Elekdag (2009) and Blix and Sellin (1998) use a simpler approach, estimating elasticities of global growth with respect to risk factors by running an OLS regression on each risk factor individually. The same OLS coefficients are used as weights for the skewness and variance at all forecast horizons, ignoring any lag structure and potential interactions between risk factors.…”

Section: Risk Indicators and Global Growthmentioning

confidence: 99%

See 2 more Smart Citations

Quantifying Uncertainties in Global Growth Forecasts

Ohnsorge¹,

Stocker²,

Some³

2016

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The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

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Section: Risk Indicators and Global Growthmentioning

confidence: 86%

Section: Risk Indicators and Global Growthmentioning

confidence: 99%

Section: Risk Indicators and Global Growthmentioning

confidence: 99%

See 1 more Smart Citation

Quantifying Uncertainties in Global Growth Forecasts

Ohnsorge¹,

Stocker²,

Some³

2016

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“…In Pakistan, Jawaid et al (2017) have used the same method for forecasting Pakistan's regional trade. Accordingly, in this study we used fan chart technique (Kannan & Elekdag, 2009) for forecasting of growth in components of financial development (M2, DCP, DCPB, and MC) for the period of 2016 to 2025.…”

Section: Fan Chartmentioning

confidence: 99%

Forecasting Uncertainty and Risk of Financial Development in Pakistan: Fan Chart Approach

Khan¹

2018

SAJMS

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This study is conducted to forecast the components of financial development of Pakistan for the period of 2016 to 2025. These components include M2, DCP, DCPB, and MC. Originally, 36 years' time series data taken from 1980 to 2015. The present study is very much different in that it uses a newly developed technique that is Fan chart. It is used to forecast with given level of uncertainty. Risk information of upside and downside is another feature of fan chart approach. The results of M2 indicate that, downside risk at the start of forecasting in the year of 2016 initially, but after that it will start upside risk in the reaming period of 2017 to highest value in 2025. This shows that, chances of increase in value of M2 in the upcoming forecasted period. On the other side forecasted value of DCP will have an upside risk during the all period. Whereas, value of DCPB indicates a downside risk in the all forecasted period of 2016 to 2025. At the same time, value of MC has a downside risk in the all-time period. On the basis of these findings, it is recommended to policy makers to keep a diligent eye on risk uncertainty. Downside risk is an alarming situation in the coming years or the uncertainty around to the extent of that change. Upside risk should also be considered by the policy maker to make better decisions.

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“…By employing the methodology of Kannan and Elekdag (2009), following steps have been used to produce fan chats for growth in aggregate and regional trade:…”

Section: Methodsmentioning

confidence: 99%

Uncertainty and Risk Analysis of Pakistan's Regional Trade: Fan Chart Approach

Jawaid¹,

Waheed²

2017

jms.2014

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Economic forecasting, both specific and general, is a crucial part of economic planning for a country. It is required to effectively deal with uncertainity as well as possible negative impact of proposed policies in future. Therefore, correct predictions will improve the effectiveness of the decision-making process. This study is a pioneering attempt to forecast aggregate and regional trade of Pakistan by using annual time series data from 1974 to 2014. With the help of fan chart, aggregate and regional trade of Pakistan have been forecast from 2015 to 2020. Fan chart provides ranges of forecast at different levels of significance as well as assesses. The risk associated with the forecast value, namely upside and downside risk. The results suggest that there is considerable uncertainty associated with the regional trade of Pakistan. The policy makers are suggested to monitor downside risk associated with the exports and upside risk associated with the imports of the country.

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Incorporating Market Information Into the Construction of the Fan Chart

Cited by 7 publications

References 7 publications

Quantifying Uncertainties in Global Growth Forecasts

Quantifying Uncertainties in Global Growth Forecasts

Forecasting Uncertainty and Risk of Financial Development in Pakistan: Fan Chart Approach

Uncertainty and Risk Analysis of Pakistan's Regional Trade: Fan Chart Approach

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