What is Macro Forecasting?
In recent years there has been increasing interest in forecasting methods that utilize large data sets. There is awareness that there is a huge quantity of information available in the economic arena which might be useful for forecasting, but standard econometric techniques are not well suited to extract this in a useful form.
Methodologies for Forecasting:
Employers Opinion Method.
In many developed countries the opinion of employers is sought to each at a definite assessment of future manpower required in different categories in their respective field and group. For this, the allowance for death, retirement, migration and occupational mobility are made and finally arrived at the decision.
It is helpful in short-term forecasts and useful in case of highly skilled professionals. Even if the technique is for making short-term manpower forecast has got some constraints. It holds true for a large corporate sector with well staffed personnel divisions. But where the markets have stiff competition the employer’s forecast cannot be aggregated.
As the name suggests, it is a method used in which norms are applied for employing manpower to produce goods and services. A Normative Method describes one or more desirable futures and envisages what paths could lead to them.
Normative or goal-oriented forecasting assumes that there will exist needs in the future which will have some effect on the parameter being studied. This is of importance in longer term traffic forecasting (typically in excess of 5 years), since the total traffic is dependent on a variety of other parameters such as population, subscribers and calling rates, etc.
The term “normative” suggests that our starting point for the forecast lies in the future itself so that-instead of looking forward from the present as we described for trend forecasting, we project backwards to the present from this future point. A matter which cannot be analyzed statistically may need to use some form of normative forecasting.
Normative approach aims at finding out not only how things are, but above all how they should be, which means that it will be necessary to define the subjective point of view that shall be used. In other words to select the people s who shall evaluate the proposals which aim at improving the objective of study.
It is the method in which the requirement of manpower is further sub-divided into components and then separate norms are envisaged to each component and reached at a forecast of manpower requirements for each component. It has normative approach. The difference is only the use of different norms for different components.
International Comparisons Method.
This is helpful in use of stable norms. There is mostly subjective evaluation of international experiences and justification on objective evaluations is not easy.
MRP approach has three sets of limitations which can be summarized as under:
Firstly, in respect of GDP the forecasts are made separately also there is a separate approach for employment-output ratio, occupational structure and educational structure. The concept confirms that it is independent which does not look like or appears to be actually true. Secondly, as per the method it is assumed that the occupational and educational structures used gets or develop stability with time.
This forms a very unrealistic assumption, as it leads to the assumption that demand for manpower is independent of the supply. Thirdly, MRP approach puts demand on a wide variety of data which is fairly expensive and also not always available in the published form. Therefore because of which one may need to go back to primary data collection on many aspects.