How much Quality does Quantity Need?

The Compilation of the WIFO business cycle forecast and the importance of ecometric models, assumptions, interpretations, and discussion processes

Abstract

The article deals with the compilation of annual business and business cycle forecasts at the Austrian Institute for Business Research (WIFO). WIFO regularly gathers and generates data that are used as variables in an econometric model on the basis of which the predicted growth rate of the Austrian economy can be specified in percentiles of the gross domestic product. The compilation of a business forecast not only has a quantitative component but also a qualitative one. The article studies the qualitative component on the basis of extensive expert interviews, allowing the dimension of tacit knowledge to be reconstructed on the basis of process of negotiation. The qualitative aspects of business forecaste appear to be technical and social necessities.