Monday, January 5, 2009

Consensus Forecasts: Bloggers vs. Bay Street

As a follow up to the Great Canadian EconoBlog Forecast contest, I thought it would be interesting to compare the opinions of Canadian economics bloggers with the pros on Bay Street. The charts below compare the mean forecast and range of forecasts for 4 of the macro-variables in the contest made by Bloggers and Bay Street (I didn't have time to gather TSX forecasts from the Banks). The sample includes TD, CIBC, Scotia, RBC, and BMO (apologies to National Bank, I couldn't find updated forecasts on your website). The sample of bloggers includes myself, Nick and Stephen from Worthwhile Canadian Initiative, Mike Moffat, and Andrew from Stackelberg Follower. I know others made forecasts but if I couldn't see a link to a blog, you weren't included.

It is interesting that the variable that is the hardest to forecast, the exchange rate, has an appropriately large range (78 cents to 94 cents) and that this range is almost identical between groups of forecasters. Moreover, the Banks would seem to be slightly more bullish on growth, hence the BoC target close to 1%, than the bloggers consensus of only about 0.5%. Other than that, it is generally agreed that inflation will be too low and unemployment too high.

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