A SMART AUTOMATED MACROECONOMETRIC FORECASTING SYSTEM

A smart, automated forecasting system is a kind of expert system for generating forecasts wholly or partly without human intervention. A pilot-scale system is reported in this paper. The interventions are made by a rulebase which describes the actual intervention procedures of the London Business School Centre for Economic Forecasting on one of the major macroeconometric forecasting models for the U.K. economy. The rulebase is sufficiently general as to be applicable to any forecasting model. One difference of the pilot model reported in this paper from conventional models is that policy behaviour is described entirely by rules rather than equations. This allows the use of thresholds, floors, ceilings, and discontinuities.