Predicting the future:
Forecasting in innovation economics, financial economics,
and development economics

The economy is notoriously hard to predict. Nevertheless, or even because of that, large amounts of resources are devoted to making and improving these predictions. This is most evident for the prediction of macroeconomic variables, in particular the growth of GDP, but also unemployment, inflation, or tax revenue. These forecasts are covered in news reports, underlie policy making of fiscal and monetary authorities, and can themselves influence investment and consumption decisions by businesses and consumers. Given the important role that predictions play, this raises a number of questions:

How has the age of machine learning and an abundance of big data changed the landscape of prediction in economics? Are there inherent limits to how well we can predict certain phenomena? What is the relation between economic theories, theoretical models, and predictions? What about causality? What is the role of prediction in economic policy making?

This seminar will cover a variety of topics on predictions in economics, ranging from methodologies for making predictions, prediction evaluation, to predicting specific variables of economic interest. The topic blocks will include:

• Predicting ‘the next big thing’ in innovation and other technological trends
• Predicting the evolution of stock market time series over the short and long run
• Prediction of macroeconomic variables, especially GDP, but also unemployment, inflation, tax and revenue. 
• Prediction of development trajectories and outcomes for particular countries
• Methodologies and theories of prediction

Organisation:
Students will write a term paper and present it at the end of the term. Topics will be assigned at the beginning of the term. There will be a presentation session over one or two days (depending on the number of participants) at the end of term. Students will be assigned a supervisor and are expected to stay in touch with the supervisor while working on the term paper. The beginning of the seminar will feature an introduction to the topic of the seminar and to scientific writing.

Examination:
There will be no examination. Students will write a term paper and present it in class.

Methodologies and theories of prediction in economics

Prediction in finance

Predicting innovation

Predictions in development economics

Predicting Macroeconomic trends

Possibility of prediction

Prediction and policy making