Wednesday, March 30, 2011

More on Turkish foreceasting

An anonymous reader made the following comment to my post on inconsistencies in forecasting:
Very good point! I do not believe any of the forecasters in Turkey have the guts to reveal their methodology. Some of them claim that they refrain from boring the reader with technical stuff(?!). I think, they just pretend and make us believe that they use appropriate techniques to generate those numbers. How the hell would we know? Hiding behind the so called "credibility" is not enough anymore. Of course, you could still be wrong despite all your efforts. But if you stick to the scientific metholodogy and do your part properly, then you can blame the data and nobody will accuse you of anything. Respect is an earned gift!
I thank the reader for her comment, as it clarifies an important issue: My comments were not aimed at TUSIAD per se, but to the most market economists in Turkey and abroad. OK, if you are not an academic, I don't expect you to write a full paper, but at least SKETCH your methodology. But there are a couple of exceptions: I really like Yapi Kredi and Citi Turkey because both Cevdet & Ilker (and their teams) clearly spell out how they do what they do... Cevdet likes to put it into the note, which makes most of his stuff difficult to follow for anyone without a couple of Econ. grad courses under her belt, Ilker in the appendices, but both follow this golden rule.

But there is a more fundamental problem with the TUSIAD report. It is very easy to see that there is a consistency problem, especially with the growth/ current account mix. Now, what they have done maybe makes sense. Quizas, I would have said Achsooooooooooooooo if I saw their methodology and congradulated them for their ingenuity. But I can't!

BTW, as I say in the post (and earlier), it is very easy to make sure your forecasts are consistent with financial programming. If TUSIAD had done that, I still would not know if their methodology is accurate or not, but at least, I would not have noticed anything...

No comments: