ABSTRACT
The choice and application of the proper forecast technique has always been an important issue for most economic and financial institutions, and statistical bureaus. An important concern in forecasting is the problem of evaluating the nature of the forecast error, by using the appropriate statistical tests. The error associated with a forecasting procedure can result from a combination of a number of factors. If the forecast is done within the range of values of the variables used to construct the model, this is known as in period forecasting. Determination of values that lie between the known values is known as interpolation. Forecasting outside the range of the data used to construct the model is known as outside period forecasting. Concomitantly, self-judgment of the economist is an integral part of the forecasting process. Advanced technology has made forecasting models more precise than before. And, while not a perfect system, econometric forecasting models provide important information for the consumer, business, and government alike.
