Economic Methodology and Computability: Implications for The Evaluation of Econometric Forecasts
Scott A. Moss, Bruce Edmonds · 2007
this paper is to bring standard propositions of economics together with computability theory in order to assess the use of econometric forecasting in policy analysis. Our criterion for the applicability of econometric forecasting will be in terms of the relative accuracies of alternative forecasts as a result of improved model specification, estimation and/or data collection and processing techniques. We will justify this criterion by demonstrating that standard economic methodology going back to Friedman (1953) implies that elementary welfare considerations impose a duty on forecasters to identify the conditions in which their forecasts are the best available