Economic forecasting Books

Book SynopsisThe geography of services is no longer of local or national significance: it now embraces the international stage. Service industries have enabled, and themselves become participants in, world trade. Although this is not a new role, during the 1980s they have become a much more active ingredient in the process of social and economic change.Trade Review"The book's value lies in its wide-sweeping survey of what is known about the entire field... a very useinformative book that can serve as a text for economic geographers, but which also deserves to be read by those with international interests from other disciplines. His work demonstrates that economic geographers have much to contribute in this area, especially in their handling and analysis of the data on international services." Service Industries Journal "The book's value lies in its wide-sweeping survey of what is known about the entire field... a very useful classroom tool for those concerned with exposing students to a critical area of investigation that remains under-researched." Journal of Economic LiteratureTable of Contents1. The Rise of Services: Some Factual and Theoretical Perspectives. Introduction. Services: Definition and Classification. The Recent Expansion of Services. Explanations for Growth. Understatement of Role of Services. 2. The Tradability of Services. TRadable and Non-Tradable Services. Information Technology and Tradability of Services. Transport Technology and the Tradability of Services. Service Multinationals and the Tradability of Services. Case Studies of the Development of Service MNE'S. Retail Internationalisation. Government Influences on the Tradability of Services. Changes in Consumer Requirements and Expectations. 3. International Trade and Foreign Direct Investment in Services. Introduction. Measuring Trade in Services. An Outline of Global Trade in Services. The Role of Comparative Advantage. Foreign Direct Investment in Services. International Trade in Services and the Developing Countries. Developing Country Service MNE's. Eastern Europe, the Commonwealth of Independent States and International Trade in Services. Liberalizing International Trade in Services. 4. Services and the Global System of Cities. Services and the Global Urban System: Some Explanations. Services and Cities in the Global Urban System. Services and the Global Urban System: Some Examples. 5. Internationalization of Services and Restructuring of Cities. Services and Employment Restructuring in Large Metropolitan Areas: Some Comparisons. Impacts on the Urban Property Market: Offices. Changes in the Location of Services Within Cities. 6. Services in the World Economy: Some Reflections. Services in the 1990s: Victims of the Decade of Optimism?. Service-Dominated Economies: How Desirable?. Is the Globalization of Services inevitable?. Unfulfilled Potential of Telecommunications?. References. Further Reading. Bibliography. Index.

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Book SynopsisIn this prestigious edited collection, an international group of leading contributors to the law of regulation take stock of the erosion of belief in centralised planning and command and control regulation which has accompanied the collapse of communism. They explore the new directions in regulatory theory which must now be pursued.Table of ContentsIntroduction: Reconceptualizing Regulation in the Era of Globalization: Sol Picciotto. 1. Rewards and Regulation: John Braithwaite. 2. Values and Purpose in Government: Central-local Relations in Regulatory Perspective: Peter Vincent-Jones. 3. Private Regulation of the Public Sector: A Neglected Facet of Contemporary Governance: Colin Scott. 4. Using Private-Public Linkages to Regulate Environmental Conflicts: The Case of International Construction Contracts: Oren Perez. 5. Competition Law in the International Domain: Networks as a New Form of Governance: Imelda Maher. 6. Technical Cooperation and the International Coordination of Patentability of Biotechnological Inventions: Louise Davies. 7. Regulatory Conversations. Julia Black. 8. The Emotional Dimension in Legal Regulation: Bettina Lange.

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Book SynopsisIntroduces an important method for estimating correlations for large systems of assets: Dynamic Conditional Correlation (DCC). This title demonstrates the role of correlations in financial decision making, and addresses the economic underpinnings and theoretical properties of correlations and their relation to other measures of dependence.Trade Review"No doubt much more literature will develop in this area. Professor Engle has done a service by laying out how his mind is moving and thinking at the current time."--Peter Tompkins, The ActuaryTable of ContentsIntroduction vii Chapter 1: Correlation Economics 1 1.1 Introduction 1 1.2 How Big Are Correlations? 3 1.3 The Economics of Correlations 6 1.4 An Economic Model of Correlations 9 1.5 Additional Influences on Correlations 13 Chapter 2: Correlations in Theory 15 2.1 Conditional Correlations 15 2.2 Copulas 17 2.3 Dependence Measures 21 2.4 On the Value of Accurate Correlations 25 Chapter 3: Models for Correlation 29 3.1 The Moving Average and the Exponential Smoother 30 3.2 Vector GARCH 32 3.3 Matrix Formulations and Results for Vector GARCH 33 3.4 Constant Conditional Correlation 37 3.5 Orthogonal GARCH 37 3.6 Dynamic Conditional Correlation 39 3.7 Alternative Approaches and Expanded Data Sets 41 Chapter 4: Dynamic Conditional Correlation 43 4.1 DE-GARCHING 43 4.2 Estimating the Quasi-Correlations 45 4.3 Rescaling in DCC 48 4.4 Estimation of the DCC Model 55 Chapter 5: DCC Performance 59 5.1 Monte Carlo Performance of DCC 59 5.2 Empirical Performance 61 Chapter 6: The MacGyver Method 74 Chapter 7: Generalized DCC Models 80 7.1 Theoretical Specification 80 7.2 Estimating Correlations for Global Stock and Bond Returns 83 Chapter 8: FACTOR DCC 88 8.1 Formulation of Factor Versions of DCC 88 8.2 Estimation of Factor Models 93 Chapter 9: Anticipating Correlations 103 9.1 Forecasting 103 9.2 Long-Run Forecasting 108 9.3 Hedging Performance In-Sample 111 9.4 Out-of-Sample Hedging 112 9.5 Forecasting Risk in the Summer of 2007 117 Chapter 10: Credit Risk and Correlations 122 Chapter 11: Econometric Analysis of the DCC Model 130 11.1 Variance Targeting 130 11.2 Correlation Targeting 131 11.3 Asymptotic Distribution of DCC 134 Chapter 12: Conclusions 137 References 141 Index 151

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Book SynopsisThe crash of 2008 revealed that the world's central banks had failed to offset the financial imbalances that led to the crisis, and lacked the tools to respond effectively. This title provides an insider's look into how central banks have evolved and why they are critical to the functioning of market economies.Trade ReviewNamed one of Financial Times (FT.com)'s Books of the Year in Nonfiction Round-Up in the Business & Economics list for 2010 "[T]he depth of its analysis will make Banking on the Future an important source of insights for years to come."--Ed Crooks, Financial Times "The best assessment yet of the role played by the leading western central banks--the U.S. Federal Reserve, the ECB and the Bank of England--in the run-up to the financial crisis and beyond, from two former insiders at the top level of UK policymaker."--Financial Times (FT Critics Pick 2010) "Buy the book with confidence."--Jane Fuller, Financial World "Books on central banking usually vie with pills as sleep inducers, but Banking on the Future: The Fall and Rise of Central Banking is actually a page-turner."--Andrew Allentuck, National Post "In this forensic and engaging overview, Susan Hough presents a frank, entertaining and personal review of the history of ideas, practice, personalities and experience in the science of earthquake prediction. Although Hough is a respected scientist, she takes a journalist's viewpoint here, not shying away from legitimate criticism of those she regards as friends, and taking on the credulous at the edge of, or even beyond, the mainstream scientific."--Ian Main, Times Higher Education "[A] valuable, accessible volume... This clear, nontechnical guide on the present and future of central banking from two eminent policy makers could not have come at a better time."--Choice "A better title for this book would have been: All You Ever Wanted to Know About Central Banking and More... Davies and Green provide much to inform and interest diverse audiences...[I]t's a book that practitioners and students of central banking need to have on their shelf."--Management Today "We get an insider's view of the nuts and bolts of central banking, but not so inside that the authors are uncritical. They readily identify the pressure to change regulations or advice when regulators feel under pressure to display expertise in new issues... These are snippets of insight that only critical insiders know how to capture."--Dick Bryan, Australian Review of Public AffairsTable of ContentsPreface vii Abbreviations ix Introduction 1 Chapter One: What Is Central Banking and Why Is It Important? 9 Chapter Two: Monetary Stability 23 Chapter Three: Financial Stability 52 Chapter Four: Financial Infrastructure 90 Chapter Five: Asset Prices 115 Chapter Six: Structure, Status, and Accountability 141 Chapter Seven: Europe: A Special Case 182 Chapter Eight: Central Banking in Emerging Market Countries 212 Chapter Nine: Financial Resources, Costs, and Efficiency 236 Chapter Ten: International Cooperation 252 Chapter Eleven: Leadership 270 Chapter Twelve: An Agenda for Change 285 Afterword 297 Notes 301 Index 317

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Book SynopsisEconometric models are widely used in the creation and evaluation of economic policy in the public and private sectors. This book addresses the critical earlier stage of model development, the point at which potential models are inherently incomplete.Trade Review"This book is original and powerful. It develops a Bayesian paradigm that embraces the reality of applied modeling, in which 'discoveries' of things previously unimagined are made regularly. It will be of immediate interest to all economists and statisticians who want to push Bayesian principles toward innovative practice (and who doesn't?)."—Francis X. Diebold, University of Pennsylvania"How do we know whether a statistical model is good enough for a particular economic research problem? To answer this question, John Geweke introduces the concept of incomplete models, showing how they can be effective tools for model building. This book is a significant contribution to econometrics—and a pleasure to read."—Richard Paap, Erasmus University Rotterdam"This excellent book seamlessly links many important econometric methods, models, and concepts."—Gary Koop, University of StrathclydeTable of ContentsSeries Editors' Introduction vii Preface ix Chapter 1: Introduction 1 Chapter 2: The Bayesian Paradigm 7 2.1 Complete Models 10 2.2 Model Comparison and Averaging 16 2.3 Simulation 19 2.4 Model Evaluation 23 Chapter 3: Prior Predictive Analysis and Model Evaluation 34 3.1 Data and Models 35 3.2 Prior Predictive Analysis 47 3.3 Comparison with an Incomplete Model 71 3.4 Appendix: A Gaussian Copula for Evaluating Predictive Densities of Vector Functions of Interest 84 Chapter 4: Incomplete Structural Models 86 4.1 The Essential Elements of DSGE Models 88 4.2 Strong Econometric Interpretation 95 4.3 Weak Econometric Interpretation 98 4.4 Minimal Econometric Interpretation 109 4.5 Implications for Structural Modeling 118 Chapter 5: An Incomplete Model Space 122 5.1 Context and Motivation 123 5.2 Pools of Two Models 130 5.3 Examples of Two-Model Pools 135 5.4 Pools of Multiple Models 142 5.5 Multiple-Model Pools: An Example 150 5.6 Pooling and Model Improvement 155 5.7 Consequences of an Incomplete Model Space 158 References 161

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Book SynopsisOffers an understanding of the dynamic evolution of the yield curve is critical to many financial tasks, including pricing financial assets and their derivatives, managing financial risk, allocating portfolios, structuring fiscal debt, and valuing capital goods. This title contains essential tools for academics, central banks, and more.Trade Review"Diebold and Rudebusch have succeeded in writing a milestone book that will be used variously as a standard reference, a guide for future research topics, a text book, or as a convenient introduction to the topics of yield curve modeling and macro-finance. Hence, while forecasting (especially about the future) is always fraught with peril, I'm confident that copies of the book will find their way into many collections, and that they will be actively used when they get there."--Leo Krippner, International Review of Economics and Finance "[T]he methods presented in the book are of great importance in financial market practice. The book is designed for academics, students, and practitioners working in yield curve modeling and forecasting, and it will be useful for all interested in bond markets and their links with the macroeconomic environment."--Malgorzata Doman, Zentralblatt MATHTable of ContentsList of Illustrations ix Introduction xi Preface xiii Additional Acknowledgment xvii 1 Facts, Factors, and Questions 1 *1.1 Three Interest Rate Curves 2 *1.2 Zero-Coupon Yields 3 *1.3 Yield Curve Facts 4 *1.4 Yield Curve Factors 7 *1.5 Yield Curve Questions 13 *1.6 Onward 22 2 Dynamic Nelson-Siegel 23 *2.1 Curve Fitting 23 *2.2 Introducing Dynamics 26 *2.3 State-Space Representation 30 *2.4 Estimation 34 *2.5 Multicountry Modeling 42 *2.6 Risk Management 46 *2.7 DNS Fit and Forecasting 49 3 Arbitrage-Free Nelson-Siegel 55 *3.1 A Two-Factor Warm-Up 58 *3.2 The Duffie-Kan Framework 62 *3.3 Making DNS Arbitrage-Free 64 *3.4 Workhorse Models 78 *3.5 AFNS Restrictions on A0(3) 83 *3.6 Estimation 86 *3.7 AFNS Fit and Forecasting 90 4 Extensions 96 *4.1 Variations on the Basic Theme 96 *4.2 Additional Yield Factors 105 *4.3 Stochastic Volatility 113 *4.4 Macroeconomic Fundamentals 117 5 Macro-Finance 126 *5.1 Macro-Finance Yield Curve Modeling 126 *5.2 Macro-Finance and AFNS 131 *5.3 Evolving Research Directions 144 6 Epilogue 149 *6.1 Is Imposition of No-Arbitrage Helpful? 151 *6.2 Is AFNS the Only Tractable A0(3) Model? 153 *6.3 Is AFNS Special? 155 Appendixes 159 Appendix A Two-Factor AFNS Calculations 161 * A.1 Risk-Neutral Probability 161 * A.2 Euler Equation 163 Appendix B Details of AFNS Restrictions 166 * B.1 Independent-Factor AFNS 168 * B.2 Correlated-Factor AFNS 171 Appendix C The AFGNS Yield-Adjustment Term 174 Bibliography 179 Index 197

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Book SynopsisChronicles the lives and careers of the men who defined this first wave of economic fortune tellers, men such as Roger Babson, Irving Fisher, John Moody, C J Bullock, and Warren Persons.Trade ReviewWinner of the 2015 Hagley Prize in Business History, Hagley Museum and Library and Business History Conference "[C]arefully wrought."--James Grant, Wall Street Journal "The book is a great read, based as it is around the personalities of these early forecasters... I can see a terrific movie in the 'forecasting wars' of the 1920s as these larger-than-life, quintessentially can-do Americans competed with each other to call the stock market, win followers and make a fortune."--Diane Coyle, Enlightened Economist blog "Fortune Tellers is a marvel too. It is scholarship of the highest quality, without shortcuts or gimmicks. We may not be able to trust the forecasters, but when it comes to their stories we are in excellent hands."--Pietra Rivoli, Financial Times "Friedman's well-crafted work is highly recommended to students of economics and others interested in the history of economic forecasting."--Library Journal "[Fortune Tellers] ... reminds readers that the economy remains too complex for anyone to consistently make reliable predictions about it."--Alan Wallace, Pittsburgh Tribune-Review "In Fortune Tellers, Walter Friedman shows not only where our contemporary forecasting ecosystem came from, but also its considerable influence on present-day economic thought and practice."--Michael Lind, Pacific Standard "The book is fun reading, but what makes it especially interesting for any regular consumer of modern economic forecasts is how little today's forecasters have improved on the methods of the 1910s and 1920s."--Justin Fox, Harvard Business Review blog "In a series of short biographical narratives of the first men to take up forecasting as a profession, Friedman shows how economic predictions became an integral part of the way businessmen and government officials made decisions, and how the foundations were laid for the kind of sophisticated economic modeling that we now rely on."--James Surowiecki, Democracy "Historian Friedman examines how forecasting economic performance became professionalized in the early 20th century. He adeptly and insightfully uses a biographical approach, with five case studies selected because of their contemporary significance and because each analyst understood the logic of capitalism differently and took a different approach to forecasting."--Choice "Fortune Tellers is an engaging account of the beginnings of the vibrant industry of American economic forecasting."--George A. Schade, Financial History "The value of Friedman's book isn't just in the brief biographies ... but also in Friedman's insights and asides about the business, financial and political context of the time. Friedman doesn't mention it, but few readers will miss the implicit comparison to today."--Randolph Walerius, Roll Call "There is no better way to gain an understanding of how economic forecasting began than reading Walter A. Friedman's new book Fortune Tellers... It shines a light on the entrepreneurs like Roger Babson and John Moody who created the economic forecasting field a century ago and transformed it into successful businesses."--James McCusker, Everett Herald "[C]aptivating story... Compelling."--Michael A. Martorelli, Financial Analysts Journal "Prof. Friedman ... writes smoothly and wisely."--Books Delights "The author has done a most remarkable job in bringing together these ideas and histories in a graceful and fascinating book."--E. Roy Weintraub, Journal of American History "This is beyond doubt a fascinating and enjoyable book."--Geoffrey Wood, Central Banking Journal "Friedman's fascinating study ... makes a major contribution towards the history of forecasting in the USA. Friedman's case studies present competing but ultimately convergent paths to modern forecasting, highlighting a history which comprised what he identifies as five world views of the future."--Roger Middleton, European Journal of History of Economic Thought "Friedman notes some long-lasting contributions of these pioneers and credits them with inspiring succeeding generations of forecasters who may or may not have raised the art to a science. Readers who struggle with that question will appreciate this entertaining look at the predecessors of the analysts whose views they probably seek almost every day."--M.A.M., Financial Analysts Journal "This is one of the best books that I have read over the last number of years. It is very readable and, like all good books, exceptionally thought-provoking. Economic and business historians, economists, and anyone who has an interest in the history of economic thought will benefit from reading this book. Students, policy-makers, and investors would also benefit from reading it because it highlights the complexity of capitalism, how difficult it is to understand the capitalist system, and the foolishness of placing too much weight on economic forecasts. Bottom line: buy, read, and digest this book. Let me finish my review with a forecast based solely on intuition: Fortune Tellers will become a classic."--John D. Turner, Economic History Review "Friedman's business-history approach goes well beyond the history of economic and scientific thought. His collection of portraits has a lot to say for our current times, now that the dictionary of the 1930s (depression, deflation, mass unemployment) has resurfaced everywhere but particularly in the richest countries in the world."--Francesco Daveri, Journal of Economics "In his book Friedman has been able to cast a substantial contribution to the history of economics in an entertaining, very readable approach."--Roman Koster, History of Economics Ideas "The book deserves to be widely read."--Roger E. Backhouse, Technology & Culture "A fascinating story of the early economic forecasting in the United States... A pleasure to read and the narrative is both informative and insightful. I highly recommend it to both economists and non-economists."--Aris Spanos, Journal of the History of Economic ThoughtTable of ContentsPreface ix Introduction 1 Chapter 1 Roger W. Babson: The Rule of Past Patterns 12 "The fundamental law of 'action reaction' " Chapter 2 Irving Fisher: The Economy as a Mathematical Model 51 "The velocity of money" Chapter 3 John Moody: The Bright Light of Transparency 86 "An aggregation of over 440 large industrial, franchise and transportation Trusts" Gallery of Business and Forecasting Charts Chapter 4 C. J. Bullock and Warren Persons: The Harvard ABC Chart 128 "The statistician ... attempts to find a specific analogy existing in an orderly universe" Chapter 5 Wesley Mitchell and Herbert Hoover: Forecasting as Policy 166 "If we could foresee the business cycle, there would be none" Chapter 6 Visions of the Future 194 Postscript 209 Acknowledgments 213 Notes 217 Index 261

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Book SynopsisTrade ReviewWinner of the 2015 Hagley Prize in Business History, Hagley Museum and Library and Business History Conference "[C]arefully wrought."--James Grant, Wall Street Journal "The book is a great read, based as it is around the personalities of these early forecasters... I can see a terrific movie in the 'forecasting wars' of the 1920s as these larger-than-life, quintessentially can-do Americans competed with each other to call the stock market, win followers and make a fortune."--Diane Coyle, Enlightened Economist blog "Fortune Tellers is a marvel too. It is scholarship of the highest quality, without shortcuts or gimmicks. We may not be able to trust the forecasters, but when it comes to their stories we are in excellent hands."--Pietra Rivoli, Financial Times "Friedman's well-crafted work is highly recommended to students of economics and others interested in the history of economic forecasting."--Library Journal "[Fortune Tellers] ... reminds readers that the economy remains too complex for anyone to consistently make reliable predictions about it."--Alan Wallace, Pittsburgh Tribune-Review "In Fortune Tellers, Walter Friedman shows not only where our contemporary forecasting ecosystem came from, but also its considerable influence on present-day economic thought and practice."--Michael Lind, Pacific Standard "The book is fun reading, but what makes it especially interesting for any regular consumer of modern economic forecasts is how little today's forecasters have improved on the methods of the 1910s and 1920s."--Justin Fox, Harvard Business Review blog "In a series of short biographical narratives of the first men to take up forecasting as a profession, Friedman shows how economic predictions became an integral part of the way businessmen and government officials made decisions, and how the foundations were laid for the kind of sophisticated economic modeling that we now rely on."--James Surowiecki, Democracy "Historian Friedman examines how forecasting economic performance became professionalized in the early 20th century. He adeptly and insightfully uses a biographical approach, with five case studies selected because of their contemporary significance and because each analyst understood the logic of capitalism differently and took a different approach to forecasting."--Choice "Fortune Tellers is an engaging account of the beginnings of the vibrant industry of American economic forecasting."--George A. Schade, Financial History "The value of Friedman's book isn't just in the brief biographies ... but also in Friedman's insights and asides about the business, financial and political context of the time. Friedman doesn't mention it, but few readers will miss the implicit comparison to today."--Randolph Walerius, Roll Call "There is no better way to gain an understanding of how economic forecasting began than reading Walter A. Friedman's new book Fortune Tellers... It shines a light on the entrepreneurs like Roger Babson and John Moody who created the economic forecasting field a century ago and transformed it into successful businesses."--James McCusker, Everett Herald "[C]aptivating story... Compelling."--Michael A. Martorelli, Financial Analysts Journal "Prof. Friedman ... writes smoothly and wisely."--Books Delights "The author has done a most remarkable job in bringing together these ideas and histories in a graceful and fascinating book."--E. Roy Weintraub, Journal of American History "This is beyond doubt a fascinating and enjoyable book."--Geoffrey Wood, Central Banking Journal "Friedman's fascinating study ... makes a major contribution towards the history of forecasting in the USA. Friedman's case studies present competing but ultimately convergent paths to modern forecasting, highlighting a history which comprised what he identifies as five world views of the future."--Roger Middleton, European Journal of History of Economic Thought "Friedman notes some long-lasting contributions of these pioneers and credits them with inspiring succeeding generations of forecasters who may or may not have raised the art to a science. Readers who struggle with that question will appreciate this entertaining look at the predecessors of the analysts whose views they probably seek almost every day."--M.A.M., Financial Analysts Journal "This is one of the best books that I have read over the last number of years. It is very readable and, like all good books, exceptionally thought-provoking. Economic and business historians, economists, and anyone who has an interest in the history of economic thought will benefit from reading this book. Students, policy-makers, and investors would also benefit from reading it because it highlights the complexity of capitalism, how difficult it is to understand the capitalist system, and the foolishness of placing too much weight on economic forecasts. Bottom line: buy, read, and digest this book. Let me finish my review with a forecast based solely on intuition: Fortune Tellers will become a classic."--John D. Turner, Economic History Review "Friedman's business-history approach goes well beyond the history of economic and scientific thought. His collection of portraits has a lot to say for our current times, now that the dictionary of the 1930s (depression, deflation, mass unemployment) has resurfaced everywhere but particularly in the richest countries in the world."--Francesco Daveri, Journal of Economics "In his book Friedman has been able to cast a substantial contribution to the history of economics in an entertaining, very readable approach."--Roman Koster, History of Economics Ideas "The book deserves to be widely read."--Roger E. Backhouse, Technology & Culture "A fascinating story of the early economic forecasting in the United States... A pleasure to read and the narrative is both informative and insightful. I highly recommend it to both economists and non-economists."--Aris Spanos, Journal of the History of Economic ThoughtTable of ContentsPreface ix Introduction 1 Chapter 1 Roger W. Babson: The Rule of Past Patterns 12 "The fundamental law of 'action reaction' " Chapter 2 Irving Fisher: The Economy as a Mathematical Model 51 "The velocity of money" Chapter 3 John Moody: The Bright Light of Transparency 86 "An aggregation of over 440 large industrial, franchise and transportation Trusts" Gallery of Business and Forecasting Charts Chapter 4 C. J. Bullock and Warren Persons: The Harvard ABC Chart 128 "The statistician ... attempts to find a specific analogy existing in an orderly universe" Chapter 5 Wesley Mitchell and Herbert Hoover: Forecasting as Policy 166 "If we could foresee the business cycle, there would be none" Chapter 6 Visions of the Future 194 Postscript 209 Acknowledgments 213 Notes 217 Index 261

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Book SynopsisTrade Review"While it's difficult to pinpoint what type of trader would enjoy this book the most, I think there's something for everyone, whether you're a quaint, technical trader or a fundamentalist... I feel that I'm smarter after finishing this book; I thoroughly enjoyed the lengthy journey, and would recommend this to any stock market enthusiast."--Jeff Pierce, Seeking Alpha "A highly recommended, enjoyable, well-researched, and thought-provoking book for anyone interested in stock markets and the modeling of financial processes."--Rick Gorvett, Journal of Risk and Insurance "The book is written in a readable style and does not require technical knowledge. Any reader interested in a serious approach to the origin and possible prediction of financial bubbles will enjoy reading it."--Josep M. Porra, Journal of Statistical Physics "Sornette's book is not just about finance and economics; it is also a mesmerizing introduction to game theory, fractals, catastrophe theory, critical phenomena, and much more. No prior knowledge of finance or economics is needed to understand the book... Throughout the book, Sornette makes numerous, vivid comparisons with many other fields in which the various mathematical tools he describes can be applied."--Frank Cuypers, Physics TodayTable of ContentsPreface to the Princeton Science Library Edition xiii Preface to the 2002 Edition xix 1 Financial crashes: what, how, why, and when? 3 What Are Crashes, and Why Do We Care? 3 The Crash of October 1987 5 Historical Crashes 7 The Tulip Mania 7 The South Sea Bubble 9 The Great Crash of October 1929 12 Extreme Events in Complex Systems 15 Is Prediction Possible? A Working Hypothesis 20 2 Fundamentals of financial markets 26 The Basics 27 Price Trajectories 27 Return Trajectories 30 Return Distributions and Return Correlation 33 The Efficient Market Hypothesis and the Random Walk 38 The Random Walk 38 A Parable: How Information Is Incorporated in Prices, Thus Destroying Potential "Free Lunches" 42 Prices Are Unpredictable, or Are They? 45 Risk-Return Trade-Off 47 3 Financial crashes are "outliers" 49 What Are "Abnormal" Returns? 49 Drawdowns (Runs) 51 Definition of Drawdowns 51 Drawdowns and the Detection of "Outliers" 54 Expected Distribution of "Normal" Drawdowns 56 Drawdown Distributions of Stock Market Indices 60 The Dow Jones Industrial Average 60 The Nasdaq Composite Index 62 Further Tests 65 The Presence of Outliers Is a General Phenomenon 69 Main Stock Market Indices, Currencies, and Gold 70 Largest U.S. Companies 73 Synthesis 75 Symmetry-Breaking on Crash and Rally Days 76 Implications for Safety Regulations of Stock Markets 77 4 Positive feedbacks 81 Feedbacks and Self-Organization in Economics 82 Hedging Derivatives, Insurance Portfolios, and Rational Panics 89 "Herd" Behavior and "Crowd" Effect 91 Behavioral Economics 91 Herding 94 Empirical Evidence of Financial Analysts' Herding 96 Forces of Imitation 99 It Is Optimal to Imitate When Lacking Information 99 Mimetic Contagion and the Urn Models 104 Imitation from Evolutionary Psychology 106 Rumors 108 The Survival of the Fittest Idea 111 Gambling Spirits 112 "Anti-Imitation" and Self-Organization 114 Why It May Pay to Be in the Minority 114 El-Farol's Bar Problem 115 Minority Games 117 Imitation versus Contrarian Behavior 118 Cooperative Behaviors Resulting from Imitation 121 The Ising Model of Cooperative Behavior 122 Complex Evolutionary Adaptive Systems of Boundedly Rational Agents 130 5 Modeling financial bubbles and market crashes 134 What Is a Model? 134 Strategy for Model Construction in Finance 135 Basic Principles 135 The Principle of Absence of Arbitrage Opportunity 136 Existence of Rational Agents 137 "Rational Bubbles" and Goldstone Modes of the Price "Parity Symmetry" Breaking 139 Price Parity Symmetry 140 Speculation as Spontaneous Symmetry Breaking 144 Basic Ingredients of the Two Models 148 The Risk-Driven Model 150 Summary of the Main Properties of the Model 150 The Crash Hazard Rate Drives the Market Price 152 Imitation and Herding Drive the Crash Hazard Rate 155 The Price-Driven Model 162 Imitation and Herding Drive the Market Price 162 The Price Return Drives the Crash Hazard Rate 164 Risk-Driven versus Price-Driven Models 168 6 Hierarchies, complex fractal dimensions, and log-periodicity 171 Critical Phenomena by Imitation on Hierarchical Networks 173 The Underlying Hierarchical Structure of Social Networks 173 Critical Behavior in Hierarchical Networks 177 A Hierarchical Model of Financial Bubbles 181 Origin of Log-Periodicity in Hierarchical Systems 186 Discrete Scale Invariance 186 Fractal Dimensions 188 Organization Scale by Scale: The Renormalization Group 192 Principle and Illustration of the Renormalization Group 192 The Fractal Weierstrass Function: A Singular Time-Dependent Solution of the Renormalization Group 195 Complex Fractal Dimensions and Log-Periodicity 198 Importance and Usefulness of Discrete Scale Invariance 208 Existence of Relevant LengthScales 208 Prediction 209 Scenarios Leading to Discrete Scale Invariance and Log-Periodicity 210 Newcomb-Benford Law of First Digits and the Arithmetic System 211 The Log-Periodic Law of the Evolution of Life? 213 Nonlinear Trend-Following versus Nonlinear Fundamental Analysis Dynamics 217 Trend Following: Positive Nonlinear Feedback and Finite-Time Singularity 218 Reversal to the Fundamental Value: Negative Nonlinear Feedback 220 Some Characteristics of the Price Dynamics of the Nonlinear Dynamical Model 223 7 Autopsy of major crashes: universal exponents and logperiodicity 228 The Crash of October 1987 228 Precursory Pattern 231 Aftershock Patterns 236 The Crash of October 1929 239 The Three Hong Kong Crashes of 1987, 1994, and 1997 242 The Hong Kong Crashes 242 The Crash of October 1997 and Its Resonance on the U.S. Market 246 Currency Crashes 254 The Crash of August 1998 259 Nonparametric Test of Log-Periodicity 263 The Slow Crash of 1962 Ending the "Tronics" Boom 266 The Nasdaq Crash of April 2000 269 "Antibubbles" 275 The "Bearish" Regime on the Nikkei Starting from January 1, 1990 276 The Gold Deflation Price Starting in Mid-1980 278 Synthesis: "Emergent" Behavior of the Stock Market 279 8 Bubbles, crises, and crashes in emergent markets 281 Speculative Bubbles in Emerging Markets 281 Methodology 285 Latin-American Markets 286 Asian Markets 295 The Russian Stock Market 304 Correlations across Markets: Economic Contagion and Synchronization of Bubble Collapse 309 Implications for Mitigations of Crises 314 9 Prediction of bubbles, crashes, and antibubbles 320 The Nature of Predictions 320 How to Develop and Interpret Statistical Tests of Log-Periodicity 325 First Guidelines for Prediction 329 What Is the Predictive Power of Equation (15)? 329 How Long Prior to a Crash Can One Identify the Log-Periodic Signatures? 330 A Hierarchy of Prediction Schemes 334 The Simple Power Law 334 The "Linear" Log-Periodic Formula 335 The "Nonlinear" Log-Periodic Formula 336 The Shank's Transformation on a Hierarchy of Characteristic Times 336 Application to the October 1929 Crash 337 Application to the October 1987 Crash 338 Forward Predictions 338 Successful Prediction of the Nikkei 1999 Antibubble 339 Successful Prediction of the Nasdaq Crash of April 2000 342 The U.S. Market, December 1997 False Alarm 342 The U.S. Market, October 1999 False Alarm 346 Present Status of Forward Predictions 346 The Finite Probability That No Crash Will Occur during a Bubble 346 Estimation of the Statistical Significance of the Forward Predictions 347 Statistical Confidence of the Crash"Roulette" 347 Statistical Significance of a Single Successful Prediction via Bayes's Theorem 349 The Error Diagram and the Decision Process 351 Practical Implications on Different Trading Strategies 352 10 2050: The end of the growth era? 355 Stock Markets, Economics, and Population 355 The Pessimistic Viewpoint of "Natural" Scientists 357 The Optimistic Viewpoint of "Social" Scientists 359 Analysis of the Faster-Than-Exponential Growth of Population, GDP, and Financial Indices 361 Refinements of the Analysis 369 Complex Power Law Singularities 369 Prediction for the Coming Decade 371 The Aging "Baby Boomers" 377 Related Works and Evidence 378 Scenarios for the "Singularity" 383 Collapse 384 Transition to Sustainability 389 Resuming Accelerating Growth by Overpassing Fundamental Barriers 393 The Increasing Propensity to Emulate the Stock Market Approach 395 References 397 Index 419

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Table of ContentsContentsAcknowledgmentsPart I. OrientationChapter 1. The "Big Three" Model of ChangeRoadblocks to Progress: The Change ProblemWhat Is Change?The Importance of Motion: An Action View of OrganizationsThe "Big Three" Model: Three Kinds of Motion, Three Forms of Change, Three Roles in the Change ProcessLooking Back or Looking Forward?: Multiple Possibilities and the Opportunities for ManagersPart II. Change When?Chapter 2. Organizations and Environments in Motion: The Nature and Scope of Change PressuresEnvironmental Forces: Adaptation and ChoiceLife Cycles, "Growth," and Organic Change PressuresPolitical Conflicts and Economic Interests: The Struggle for ControlIntegrating the ForcesMastering Emergent Change: Lessons for LeadersChapter 3. Fitting or Creating the Environment: "Macro-Evolutionary" ChangeIntroductory Notes"Rockport Shoe Company: The Evolution of the Katz Family Business," by James A. Phills, Jr."Banc One Corporation: Anticipatory Evolution," by Paul S. Myers and Rosabeth Moss Kanter"The Sweater Trade, From Hong Kong to New York," by James Lardner"Keeping Up with the Information: On-line in the Philippines and London," by John Maxwell HamiltonChapter 4. Growing and Aging: "Micro-Evolutionary" ChangeIntroductory Notes"The Rise and Fall of an Entrepreneur," by Thomas R. IttlesonHypergrowth and Transition at Apple Computer:"Diary of a Middle Manager," by Donna Dubinsky"Jobs Talks About His Rise and Fall," by Gerald C. Lubenow and Michael Rogers"John Sculley's Lessons from Inside Apple," by Steven Pearlstein and Lucien Rhodes"The Big Store: Sears in Maturity," by Donald R. KatzChapter 5. Power and Politics: "Revolutionary Change" Introductory Notes"Power, Greed, and Glory on Wall Street," by Ken Auletta"Champagne Shoot-out in France," by Keith WheatleyWar and Peace at the Bottom:"War and Peace: Labor Relations at Two Steelmakers," by Thomas F. O'Boyle and Terence Roth"Class Consciousness Raising," by Stanley W. Angrist"Weirton to Seek Cuts in Its Work Force," by Pamela GaynorPart lII. Change What?Chapter 6. Change in Form, Forms of ChangeOrganizational Identity and Change at the BoundariesSize, Shape, and Habits: Changing Structure and CultureThe Drama of Control Change: Ownership, Governance, and Stakeholder VoiceA Note on Crisis ManagementManagerial Implications of Changes in Organizational FormChapter 7. Restructuring and Redefining Boundaries: Identity ChangeIntroductory Notes"Reinventing an Italian Chemical Company: Montedison 1986," by Joseph L. Bower, Neil Monnery, and William O. Ingle"The Human Side of Mergers: The Western-Delta Story," by Cynthia A. Ingols and Paul S. Myers"The Feudal World of Japanese Manufacturing," by Kuniyasu SakaiChapter 8. Shaping Up, Skinnying Down, and Revitalizing: Coordination and "Culture" ChangeIntroductory NotesTwo CEOs on Change in Form:"The Logic of Global Business: An Interview with ABB's Percy Barnevik," by William Taylor"Championing Change: An Interview with Bell Atlantic's Raymond Smith," by Rosabeth Moss Kanter"Driving Quality at Ford," by Greg Easterbrook"The Case of the Downsizing Decision," by Barry A. SteinChapter 9. Makeover Through Takeover: Control ChangeIntroductory Notes"Lucky Stores: Restructuring to Survive the Takeover Threat," by Lisa Richardson and Alistair Williamson"Lessons from a Middle Market LBO: The Case of O. M. Scott," by George P. Baker and Karen H. WruckPart IV. Change How?Chapter 10. The Challenges of Execution: Roles and Tasks in the Change ProcessThe Messy Terrain of ChangeThe Changemakers: Strategists, Implementors, RecipientsShips Passing in the Day: How Views of Change DifferTen Commandments for Executing ChangeCharting a Course for ChangeResponding to Situational RequirementsChapter 11. Sensing the Environment, Creating Visions: Change StrategistsIntroductory Notes"Northwest Airlines Confronts Change," by Susan Rosegrant and Todd JickBehind the Steering Wheel at General Motors, 1985-90:"The Innovator," by Cary Reich"How I Would Turn Around GM," by Ross Perot"The Painful Reeducation of a Company Man: An Interview with Roger Smith," by Business Monthly"Advice for G.M.'s Bob Stempel," by Paul Judge"Bob Galvin and Motorola, Inc.," by Todd Jick and Mary GentileChapter 12. Action Tools and Execution Dilemmas: Change ImplementorsIntroductory Notes"The Dilemmas of a Changemaker," by William Shea"Three in the Middle: The Experience of Making Change at Micro Switch," by Susan Rosegrant and Todd Jick"Toward a Boundary-less Firm at General Electric," by Mark Potts"British Air's Profitable Private Life," by Steve LohrChapter 13. Angered or Energized?: Change RecipientsIntroductory Notes"IBM's Blue Mood Employees," by Paul B. Carroll"Takeover: A Tale of Loss, Change, and Growth," by Dwight Harshbarger"GE Keeps Those Ideas Coming," by Thomas A. Stewart"Downsizing: One Manager's Personal Story," by Amy LevyPart V. ActionChapter 14. Where to BeginWhy Organizations Succeed: Assessing Change StrategyWhen Organizational Change Works: Building the Future Through Understanding the PastMaking It Happen and Making It StickGetting StartedIndex

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Book SynopsisCovers a variety of topics in financial planning and forecasting.Table of ContentsE/P ratio anomaly and time-variation in expected stock returns: Finnish evidence (J.-P. Kallunki). Valuing investments that reduce time-to-market in the semiconductor industry (Wenyih Lee et al.). Economic determinants of ROE adjustments in the electric utility industry (E.T. Nwaeze). Quantitative laws of the accounting deviations caused by inflation (G.E. Gamot). An empirical examination of calls of convertible bonds when they are out of the money (H.S. Bhabra et al.). An intelligent stock selection system based on the expert system and rule induction technologies (T. Seng-cho Chou et al.).A three-factor path-independent specification of the Heath, Jarrow, and Morton term structure model (Chen Guo). Debt and inventory accounting choices: tests of the cash-flow signaling and tax-shield substitution theories (P. Hughes, R. Trezevant). On the pitfall of using intuitive judgment in audit scheduling (Shui F. Lam et al.). Improved transfer pricing based on shadow prices: segmental information (Kang-Hong Han).

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Book SynopsisPart of a series which focuses on advances in futures and options research, this title discusses a variety of topics in the field.Table of ContentsProduction, self-organized criticality, and stock prices: further evidence against random walk (A. Chandra, S. Agrawal and K. Wiesenfeld). Mathematical programming and portfolio optimizations: a clarification (M.J. Tarrazo). The importance of reliability in realizing returns (S. Ng, Y-K Ng). Deregulation and the market valuation of earnings and assets for electric utilities (E.T. Nwaeze). A flotation-cost adjusted capital asset pricing model (J.L. Heck, S.J. Cochran). Association between accounting and market-based variables: a canonical correlation approach with U.S. data (T. Salmi et al.). Financial distress and firm value (R.B. Whitaker). The "green shoe" and other factors impacting the issuance of IPOs (R.J. Kish, K.M. Hogan and G.T. Olson). Empirical dynamic stochastic models for firm dividends (E.P. Kao, P. Kumar). The dynamic classification of financial ratios: evidence from Europe of a simplified factor structure (J.L. Gallizo, P. Gargallo and M. Salvador). Forward exchange market efficiency revisited: robust cointegration testing and dynamic rationality (R. Varadan et al.). Short and long run tests of the Fisher hypothesis (K. Shrestha, S.S Chen). An alternative explanation of the market reaction to dividend changes (H. Manakyan, K. Liano and G.C. Huang).

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Book SynopsisFour out of five businesses fail due to cash problems needlessly. Every business owner has the tools to accurately forecast cash flow, they just don't know it. Financial Forecasting in Microsoft Excel shows small- to medium-sized businesses how to achieve the same forecasting power as larger companies.Trade Review"Forecasts must be meaningful and explainable. Jeff Prager's financial mastery has allowed my companies to make profitable decisions, change course when necessary and maintain relevance in our industry for more than 20 years." -- Joel Farkas, Principal, Gateway American Resources Denver, CO

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Book SynopsisGet ahead of your peers with Real Estate Financial Modelling in Excel, a book specifically designed to ensure that the next generation of property professionals become experts in the quantitative analysis of investments by teaching them how to create automated spreadsheets for the analysis of risk and return.Real estate financial modelling has become an essential skill to investment analysts as the global property industry has seen huge transformations as a result of more institutional investors, especially private equity funds, increasing their interest in the asset class. Consequently, the industry requires a new skill set from real estate professionals and graduates.Real Estate Financial Modelling in Excel will help current finance and real estate students, as well as practitioners, to harness the power of Microsoft Excel in the context of real estate investments and explain in an easy-to-follow manual style how to create financial models that will pre

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Book SynopsisWhy the global recession is in danger of becoming another Great Depression, and how we can stop it When the United States stopped backing dollars with gold in 1968, the nature of money changed. All previous constraints on money and credit creation were removed and a new economic paradigm took shape.Trade ReviewThe book is well worth reading for its analysis. (The Economist, 7th July 2012) 'Contains a fascinating and powerful diagnosis of how we got to our current pass...he makes an astonishing proposal at the end that made my jaw drop.' (Wealthbriefing.com, 14th August 2012)Table of ContentsPreface xi Chapter 1 How Credit Slipped Its Leash 1 Opening Pandora’s Box 1 Constraints on the Fed and on Paper Money Creation 3 Fractional Reserve Banking Run Amok 5 Fractional Reserve Banking 5 Commercial Banks 7 The Broader Credit Market: Too Many Lenders, Not Enough Reserves 10 Credit without Reserves 12 The Flow of Funds 13 The Rest of the World 15 Notes 15 Chapter 2 The Global Money Glut 17 The Financial Account 18 How It Works 20 What Percentage of Total Foreign Exchange Reserves Are Dollars? 23 What to Do with So Many Dollars? 24 What about the Remaining $2.8 Trillion? 26 Debunking the Global Savings Glut Theory 28 Will China Dump Its Dollars? 31 Notes 32 Chapter 3 Creditopia 33 Who Borrowed the Money? 33 Impact on the Economy 38 Net Worth 39 Profits 41 Tax Revenue 41 Different, Not Just More 41 Impact on Capital 45 Conclusion 49 Note 49 Chapter 4 The Quantity Theory of Credit 51 The Quantity Theory of Money 52 The Rise and Fall of Monetarism 55 The Quantity Theory of Credit 57 Credit and Inflation 59 Conclusion 60 Notes 61 Chapter 5 The Policy Response: Perpetuating the Boom 63 The Credit Cycle 64 How Have They Done so Far? 65 Monetary Omnipotence and the Limits Thereof 66 The Balance Sheet of the Federal Reserve 67 Quantitative Easing: Round One 69 What Did QE1 Accomplish? 71 Quantitative Easing: Round Two 72 Monetizing the Debt 73 The Role of the Trade Deficit 75 Diminishing Returns 76 The Other Money Makers 78 Notes 83 Chapter 6 Where Are We Now? 85 How Bad so Far? 85 Credit Growth Drove Economic Growth 86 So, Where Does that Leave Us? 88 Why Can’t TCMD Grow? 89 The Banking Industry: Why Still Too Big to Fail? 96 Global Imbalances: Still Unresolved 101 Vision and Leadership Are Still Lacking 104 Notes 105 Chapter 7 How It Plays Out 107 The Business Cycle 107 Debt: Public and Private 109 2011: The Starting Point 111 2012: Expect QE3 112 Impact on Asset Prices 114 2013–2014: Three Scenarios 114 Impact on Asset Prices 118 Conclusion 119 Notes 120 Chapter 8 Disaster Scenarios 121 The Last Great Depression 121 And This Time? 126 Banking Crisis 126 Protectionism 127 Geopolitical Consequences 128 Conclusion 132 Note 132 Chapter 9 The Policy Options 133 Capitalism and the Laissez-Faire Method 134 The State of Government Finances 140 The Government’s Options 142 American Solar 143 Conclusion 146 Notes 147 Chapter 10 Fire and Ice, Inflation and Deflation 149 Fire 150 Ice 151 Fisher’s Theory of Debt-Deflation 152 Winners and Losers 155 Ice Storm 157 Fire Storm 157 Wealth Preservation through Diversification 158 Other Observations Concerning Asset Prices in the Age of Paper Money 160 Protectionism and Inflation 165 Consequences of Regulating Derivatives 166 Conclusion 166 Notes 167 Conclusion 169 About the Author 171 Index 173

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Book SynopsisGo beyond technique to master the difficult judgement calls of forecasting A variety of software can be used effectively to achieve accurate forecasting, but no software can replace the essential human component. You may be new to forecasting, or you may have mastered the statistical theory behind the software's predictions, and even more advanced power user techniques for the software itselfbut your forecasts will never reach peak accuracy unless you master the complex judgement calls that the software cannot make. Profit From Your Forecasting Software addresses the issues that arise regularly, and shows you how to make the correct decisions to get the most out of your software. Taking a non-mathematical approach to the various forecasting models, the discussion covers common everyday decisions such as model choice, forecast adjustment, product hierarchies, safety stock levels, model fit, testing, and much more. Clear explanations help you better understand seasonal indices, smoothTable of ContentsAcknowledgments xv Prologue xvii Chapter 1 Profit from Accurate Forecasting 1 1.1 The Importance of Demand Forecasting 2 1.2 When Is a Forecast Not a Forecast? 2 1.3 Ways of Presenting Forecasts 3 1.3.1 Forecasts as Probability Distributions 3 1.3.2 Point Forecasts 4 1.3.3 Prediction Intervals 6 1.4 The Advantages of Using Dedicated Demand Forecasting Software 7 1.5 Getting Your Data Ready for Forecasting 8 1.6 Trading-Day Adjustments 10 1.7 Overview of the Rest of the Book 11 1.8 Summary of Key Terms 12 1.9 References 13 Chapter 2 How Your Software Finds Patterns in Past Demand Data 15 2.1 Introduction 16 2.2 Key Features of Sales Histories 16 2.2.1 An Underlying Trend 16 2.2.2 A Seasonal Pattern 17 2.2.3 Noise 22 2.3 Autocorrelation 23 2.4 Intermittent Demand 25 2.5 Outliers and Special Events 25 2.6 Correlation 27 2.7 Missing Values 30 2.8 Wrap-Up 31 2.9 Summary of Key Terms 31 Chapter 3 Understanding Your Software’s Bias and Accuracy Measures 33 3.1 Introduction 34 3.2 Fitting and Forecasting 34 3.2.1 Fixed-Origin Evaluations 36 3.2.2 Rolling-Origin Evaluations 36 3.3 Forecast Errors and Bias Measures 38 3.3.1 The Mean Error (ME) 39 3.3.2 The Mean Percentage Error (MPE) 40 3.4 Direct Accuracy Measures 40 3.4.1 The Mean Absolute Error (MAE) 40 3.4.2 The Mean Squared Error (MSE) 41 3.5 Percentage Accuracy Measures 42 3.5.1 The Mean Absolute Percentage Error (MAPE) 42 3.5.2 The Median Absolute Percentage Error (MDAPE) 44 3.5.3 The Symmetric Mean Absolute Percentage Error (SMAPE) 44 3.5.4 The MAD/MEAN Ratio 45 3.5.5 Percentage Error Measures When There Is a Trend or Seasonal Pattern 46 3.6 Relative Accuracy Measures 46 3.6.1 Geometric Mean Relative Absolute Error (GMRAE) 47 3.6.2 The Mean Absolute Scaled Error (MASE) 48 3.6.3 Bayesian Information Criterion (BIC) 49 3.7 Comparing the Different Accuracy Measures 50 3.8 Exception Reporting 52 3.9 Forecast Value-Added Analysis (FVA) 52 3.10 Wrap-Up 55 3.11 Summary of Key Terms 56 3.12 References 57 Chapter 4 Curve Fitting and Exponential Smoothing 59 4.1 Introduction 60 4.2 Curve Fitting 60 4.2.1 Common Types of Curve 60 4.2.2 Assessing How Well the Curve Fits the Sales History 63 4.2.3 Strengths and Limitations of Forecasts Based on Curve Fitting 64 4.3 Exponential Smoothing Methods 65 4.3.1 Simple (or Single) Exponential Smoothing 65 4.3.2 Exponential Smoothing When There Is a Trend: Holt’s Method 68 4.3.3 The Damped Holt’s Method 70 4.3.4 Holt’s Method with an Exponential Trend 72 4.3.5 Exponential Smoothing Where There Is a Trend and Seasonal Pattern: The Holt-Winters Method 73 4.3.6 Overview of Exponential Smoothing Methods 74 4.4 Forecasting Intermittent Demand 74 4.5 Wrap-Up 77 4.6 Summary of Key Terms 78 Chapter 5 Box-Jenkins ARIMA Models 81 5.1 Introduction 82 5.2 Stationarity 82 5.3 Models of Stationary Time Series: Autoregressive Models 85 5.4 Models of Stationary Time Series: Moving Average Models 87 5.5 Models of Stationary Time Series: Mixed Models 88 5.6 Fitting a Model to a Stationary Time Series 89 5.7 Diagnostic Checks 91 5.7.1 Check 1: Are the Coefficients of the Model Statistically Significant? 91 5.7.2 Check 2: Overfitting—Should We Be Using a More Complex Model? 92 5.7.3 Check 3: Are the Residuals of the Model White Noise? 92 5.7.4 Check 4: Are the Residuals Normally Distributed? 93 5.8 Models of Nonstationary Time Series: Differencing 94 5.9 Should You Include a Constant in Your Model of a Nonstationary Time Series? 96 5.10 What If a Series Is Nonstationary in the Variance? 97 5.11 ARIMA Notation 97 5.12 Seasonal ARIMA Models 98 5.13 Example of Fitting a Seasonal ARIMA Model 101 5.14 Wrap-Up 104 5.15 Summary of Key Terms 105 Chapter 6 Regression Models 109 6.1 Introduction 110 6.2 Bivariate Regression 110 6.2.1 Should You Drop the Constant? 113 6.2.2 Spurious Regression 114 6.3 Multiple Regression 115 6.3.1 Interpreting Computer Output for Multiple Regression 115 6.3.2 Refitting the Model 119 6.3.3 Multicollinearity 119 6.3.4 Using Dummy Predictor Variables in Your Regression Model 123 6.3.5 Outliers and Influential Observations 127 6.4 Regression Versus Univariate Methods 129 6.5 Dynamic Regression 131 6.6 Wrap-Up 132 6.7 Summary of Key Terms 132 6.8 Appendix: Assumptions of Regression Analysis 134 6.9 Reference 136 Chapter 7 Inventory Control, Aggregation, and Hierarchies 137 7.1 Introduction 138 7.2 Identifying Reorder Levels and Safety Stocks 139 7.3 Estimating the Probability Distribution of Demand 142 7.3.1 Using Prediction Intervals to Determine Safety Stocks 144 7.4 What If the Probability Distribution of Demand Is Not Normal? 146 7.4.1 The Log-Normal Distribution 146 7.4.2 Using the Poisson and Negative Binomial Distributions 148 7.5 Temporal Aggregation 151 7.6 Dealing with Product Hierarchies and Reconciling Forecasts 154 7.6.1 Bottom-Up Forecasting 154 7.6.2 Top-Down Forecasting 155 7.6.3 Middle-Out Forecasting 157 7.6.4 Hybrid Methods 157 7.6.5 Issues and Future Developments 158 7.7 Wrap-Up 159 7.8 Summary of Key Terms 160 7.9 References 161 Chapter 8 Automation and Choice 163 8.1 Introduction 164 8.2 How Much Past Data Do You Need to Apply Different Forecasting Methods? 165 8.3 Are More Complex Forecasting Methods Likely to Be More Accurate? 168 8.4 When It’s Best to Automate Forecasts 169 8.5 The Downside of Automation 173 8.6 Wrap-Up 174 8.7 References 175 Chapter 9 Judgmental Interventions: When Are They Appropriate? 177 9.1 Introduction 178 9.2 Psychological Biases That Might Catch You Out 179 9.2.1 Seeing Patterns in Randomness 179 9.2.2 Recency Bias 180 9.2.3 Hindsight Bias 181 9.2.4 Optimism Bias 181 9.3 Restrict Your Interventions 183 9.3.1 Large Adjustments Perform Better 183 9.3.2 Focus Your Efforts Where They’ll Count 184 9.4 Making Effective Interventions 185 9.4.1 Divide and Conquer 185 9.4.2 Using Analogies 186 9.4.3 Counteracting Optimism Bias 187 9.4.4 Harnessing the Power of Groups of Managers 189 9.4.5 Record Your Rationale 192 9.5 Combining Judgment and Statistical Forecasts 192 9.6 Wrap-Up 194 9.7 Reference 194 Chapter 10 New Product Forecasting 195 10.1 Introduction 196 10.2 Dangers of Using Unstructured Judgment in New Product Forecasting 197 10.3 Forecasting by Analogy 198 10.3.1 Structured Analogies 198 10.3.2 Applying Structured Analogies 199 10.4 The Bass Diffusion Model 203 10.4.1 Innovators and Imitators 203 10.4.2 Estimating a Bass Model 204 10.4.3 Limitations of the Basic Bass Model 206 10.5 Wrap-Up 207 10.6 Summary of Key Terms 208 10.7 References 209 Chapter 11 Summary: A Best Practice Blueprint for Using Your Software 211 11.1 Introduction 212 11.2 Desirable Characteristics of Forecasting Software 212 11.2.1 Data Preparation 212 11.2.2 Graphical Displays 212 11.2.3 Method Selection 214 11.2.4 Implementing Methods 215 11.2.5 Hierarchies 215 11.2.6 Forecasting with Probabilities 215 11.2.7 Support for Judgment 216 11.2.8 Presentation of Forecasts 216 11.3 A Blueprint for Best Practice 217 11.4 References 218 Index 219

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Book SynopsisEvery consumer in a modern economy is indirectly exposed to the work of a price reporting agency (PRA) each time they fill up their car, take a flight or switch on a light, and yet the general public is completely unaware of the existence of PRAs. Firms like Platts, Argus and ICIS, which are referenced every day by commodity traders and which influence billions of dollars of trade, are totally unfamiliar to consumers.The Price Reporters: A Guide to PRAs and Commodity Benchmarks brings the mysterious world of price reporting out of the shadows for the first time, providing a comprehensive guide to the agencies that set the world's commodity prices. This book explains the importance of PRAs to the global commodities industry, highlighting why PRAs affect every consumer around the world. It introduces the individual PRAs, their history and the current state of play in the industry, and also presents the challenges that the PRA industry is facing now and in the future, in Trade Review"Owain Johnson has written an important book, offering the first practitioner’s guide to the world of PRAs and commodity price formation."-Tilak K. Doshi, Managing Consultant, Muse, Stancil & Co.Table of ContentsTable of ContentsAcknowledgementsChapter 1: PRAs and the commodity markets they serveChapter 2: The PRA business modelChapter 3: How price benchmarks workChapter 4: Who are the price reporters?Chapter 5: A brief history of energy PRAsChapter 6: PRAs in the metals and minerals marketsChapter 7: PRAs in the agricultural marketsChapter 8: Petrochemical and Plastics PRAsChapter 9: PRAs in AsiaChapter 10: PRAs and environmental issuesChapter 11: PRA pricing methodologiesChapter 12: The Market-on-CloseChapter 13: The PRAs and the exchangesChapter 14: PRAs and global regulationChapter 15: PRAs and European regulationChapter 16: Academic research into PRAsChapter 17: Conclusion – the future of PRAsChapter 18: Further reading and bibliographyReferencesIndex

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Book Synopsis

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Book Synopsis

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For undergraduate and graduate courses in Business Forecasting. Written in a simple, straightforward style, Business Forecasting presents basic statistical techniques using practical business examples to teach students how to predict long-term forecasts.

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Book SynopsisA fascinating insight into how professionals and businesses can develop their foresight and strategy to ensure that they are prepared for an unpredictable future. Businesses, organizations and society-at-large are all subject to unforeseeable events and incidents that often have a dramatic impact upon prosperity and profit. Due to their unpredictable nature, business leaders and executive teams are unable to prepare for these specific events. But, through innovation, strategizing and an open-minded approach, they can restructure their organization and practices in order to mitigate (or even take advantage of) the impact of such events. In Facing Our Futures, Nikolas Badminton draws upon his decades of experience as a consultant and futurist to provide readers with the skillset and outlook they need to prepare their organization, team and themselves for whatever obstacles the future may hold. CEOs, executive teams, government leaders and policy makers need to gain a broader perspect

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Table of ContentsContentsPrefacePART 1. UNCOVERING THE RULES OF THE GAME1. Introduction: The Acquisition GameThe M&A PhenomenonBack to First Principles: The Acquisition GameA Brief History of the Research on Acquisitions2. Can You Run Harder? SynergySynergy and the Acquisition GameThe Performance Requirements of Pre-Acquisition Market ValuesThe Competitive Challenge of SynergyThe Cornerstones of SynergyPredictable Overpayment3. Do You Feel Lucky? The Acquisition PremiumThe Synergy Concept: Expectations versus RealizationsThe Resource Allocation Decision: An IntroductionRequired Performance Improvements: A Simulation ApproachThe Seductiveness of Financial Valuation Models4. Tools and Lessons for the Acquisition GamePrior Expectations and Additional Resource RequirementsCompetitorsTime, Value, and the PremiumPART 2. AN ANALYSIS OF CORPORATE ACQUISITION STRATEGIES5. Acquirer Performance and Risk TakingCorporate Acquisitions as a Strategy for Value CreationAcquisition PremiumsStrategic Relatedness of AcquisitionsMethod of PaymentThe Performance Effects of Mergers versus Tender OffersRelative Size of the AcquisitionManagerial Risk Taking Following Acquisition6. MethodologySampleAcquiring Firm PerformanceIndependent VariablesChanges in Risk Taking Following AcquisitionEmpirical Techniques7. Discussion of ResultsAggregate Results on AcquisitionsTraditional Tests and Replications of Evidence on RelatednessTesting the Acquiring Firm Performance ModelTests for Changes in Risk Taking8. Implications of the AnalysisTheoretical ContributionsPublic Policy ImplicationsPractical ImplicationsAppendix A: Review and Critique of Prior Research on Mergers and AcquisitionsAppendix B: Detailed Results of the Analysis in Part 2Appendix C: Sample and Descriptions of Targets and AcquirersUsed in the AnalysisNotesBibliographyIndexAbout the Author

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Book SynopsisThe TRACE (Toronto annual Canadian econometric) model is an annual, non-linear econometric model of the Canadian economy designed primarily to forecast the statistics which appear in the principal tables of the Canadian National Income and Expenditure Accounts. TRACE is the first Canadian econometric model from which a published ex ante forecast has been made. In this book the authors describe the model and a high-speed computer. They show how the effects of alternative combinations of federal government policies can be examined by producing sets of conditional forecasts from the model. Both impact and long-run multiplier effects of changes in fiscal and monetary policy are derived from simulation experiments performed with the model. The results show the different effects that are obtained under régimes of fixed and floating foreign exchange rates.The book presents the economic theory underlying the model and provides information on estimates of the structural param

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Book SynopsisExamines global economic developments and prospects, with a special focus on emerging market and developing economies.

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Book SynopsisA World Bank Group Flagship Report. Published semiannually, the report includes analysis of topical policy challenges faced by developing countries through in-depth research in the January edition, and shorter analytical pieces in the June edition.

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Book Synopsis'An urgent read … Karl Popper for the 21st century'  Robert Phillips, former CEO, Edelman EMEA and author of Trust me, PR is Dead 'Heffernan is ... a deft storyteller. Uncharted is ... wise and appealingly human' Tim Harford, Financial TimesHow can we think about the future? What do we need to do – and who do we need to be? In her bold and invigorating new book, distinguished businesswoman and author Margaret Heffernan explores the people and organisations who aren’t daunted by uncertainty. We are addicted to prediction, desperate for certainty about the future. But the complexity of modern life won’t provide that; experts in forecasting are reluctant to look more than 400 days out. History doesn’t repeat itself and even genetics won’t tell you everything you want to know. Ineradicable uncertainty is now a fact of life.

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Book Synopsis'A dazzling history of the future – Hamish McRae has given us a tour de force' - Tim Harford _______________ A bold and illuminating vision of the future, from one of Europe’s foremost speakers on global trends in economics, business and society What will the world look like in 2050? How will complex forces of change – demography, the environment, finance, technology and ideas about governance – affect our global society? And how, with so many unknowns, should we think about the future? One of Europe’s foremost voices on global trends in economics, business and society, Hamish McRae takes us on an exhilarating journey through the next thirty years. Drawing on decades of research, and combining economic judgement with historical perspective, Hamish weighs up the opportunities and dangers we face, analysing the economic tectonic plates of the past and present in order to help us chart a map of the future. A bold and vital vision of our planet, The World in 2050 is an essential projection for anyone worried about what the future holds. For if we understand how our world is changing, we will be in a better position to secure our future in the decades to come.Trade ReviewPRAISE FOR THE WORLD IN 2050: A dazzling history of the future – Hamish McRae has given us a tour de force. * Tim Harford *Wholeheartedly recommended … exceptionally stimulating … a cornucopia of well-reasoned, insightful analysis. -- Ian Harwood * The Society of Professional Economists *Exceptionally wide ranging, deeply thoughtful and well written ... We cannot predict the future, but fortunately we can read Hamish McRae’s masterful analysis to anticipate, understand and shape it. * Ian Goldin, Professor of Globalisation and Development, University of Oxford *Looking into the future takes courage and insight and fortunately Hamish McRae has both. In this engrossing book, he draws on a wealth of research to examine the great trends that are shaping our world and help us to understand where we are going -- Margaret MacMillanPraise for The World in 2020: Each page bristles with insights. Everybody who is thoughtful about the future should read this book * Sunday Times *A rare combination of economics, political judgement and human values -- Anthony SampsonBrings together a wealth of information, sound judgements and an eye for telling detail * Financial Times *The best topographical survey of the world’s economic landscape that I have read * International Herald Tribune *Thoughtful, sensible, and extremely well-written * Economist *

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Book SynopsisA Washington Post BestsellerWinner of the 2017 Axiom Business Book Award in Business TechnologyAmy Webb is a noted futurist who combines curiosity, skepticism, colorful storytelling, and deeply reported, real-world analysis in this essential book for understanding the future. The Signals Are Talking reveals a systemic way of evaluating new ideas bubbling up on the horizon-distinguishing what is a real trend from the merely trendy. This book helps us hear which signals are talking sense, and which are simply nonsense, so that we might know today what developments-especially those seemingly random ideas at the fringe as they converge and begin to move toward the mainstream-that have long-term consequence for tomorrow.With the methodology developed in The Signals Are Talking, we learn how to think like a futurist and answer vitally important questions: How will a technology-like artificial intelligence, machine learning, self-driving cars, biohacking, bots, and the Internet of Things-affect us personally? How will it impact our businesses and workplaces? How will it eventually change the way we live, work, play, and think-and how should we prepare for it now?Most importantly, Webb persuasively shows that the future isn't something that happens to us passively. Instead, she allows us to see ahead so that we may forecast what's to come-challenging us to create our own preferred futures.

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Book SynopsisPrediction has a venerable tradition among economists. In ""Economic Possibilities for Our Grandchildren,"" John Maynard Keynes, the well known classical economist,—even as the Great Depression was unfolding—famously threw aside the contemporary ""attack of economic pessimism"" and predicted that a century later the ""standard of life"" in economically progressive countries would be ""between four and eight times as high as it is to-day."" History has generally vindicated this optimism. As a whole—like Keynes and other economists who have answered this question about the future—our experts are generally optimistic, although the optimism is carefully guarded in some cases. This optimism accords with the broader opinion held by economists surveyed about a decade ago, although the intervening ten years of disappointing economic performance appears to have tempered it a bit. The reasons for economic optimism are abundant but can be boiled down to the fact that economists expect technology will continue to improve provided that reasonable economic incentives to encourage this discovery and to implement its fruits persist. The predicted changes range from innocent innovations that will make life a bit more comfortable (such as the pillow that learns your sleep rhythms partnered with the coffee maker that knows when you have awakened) to potentially chilling technologies that might strip our human dignity (including the almost complete elimination of privacy and electronic supplementation of the brain embedded in a government controlled educational system). So pull up a chair and listen to our group of experts expound on what they think our economic future is going to look like in fifty years!Table of ContentsChristopher J. Coyne is the F.A. Harper Professor of Economics at George Mason University and Co-Editor of The Independent Review. Michael C. Munger is Co-Editor of The Independent Review and Professor of Political Science, Economics and Public Policy, and Director of the Philosophy, Politics, and Economics Program at Duke University. Robert M. Whaples is Co-Editor and Managing Editor for The Independent Review and Professor of Economics at Wake Forest University.

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Book SynopsisThis book is written for business persons who wish to forecast consumer demands and sales. It is also designed for economic, financial, governmental, and private practitioners, who make decisions based on costs, benefits, economic trends, and growth. Finally, the book is written for first year MBA students, undergraduate students, and other readers who wish to acquire a fundamental knowledge of forecasting for the purpose of pursuing jobs in the fields of economics and finance, or for making personal plans for the future.The book emphasizes applied aspects of forecasting rather than theoretical aspects, so a working knowledge of high-school statistics and college algebra is all the mathematics that is needed. Because regression-based forecasts do not appear until the last three chapters of the book, knowledge of econometrics or time-series modeling is not a prerequisite. Additionally, although each chapter is designed to be self-explanatory, a basic understanding of econometrics might be helpful, but not necessary.The book discusses most of the forecasting methods frequently used in business and economics, such as time-series, demand and sales, investment, short-term planning, long-term growth, and regressions. To keep the book concise, only a brief introduction to the ARIMA process is introduced. Readers who wish to gain in-depth knowledge of ARIMA models are encouraged to read a book written specifically for time-series modeling.

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Book SynopsisThis book is for everyone who wants to make better forecasts. It is not about mathematics and statistics. It is about following a well-established forecasting process to create and implement good forecasts. This is true whether you are forecasting global markets, sales of SKUs, competitive strategy, or market disruptions. Today, most forecasts are generated using software. However, no amount of technology and statistics can compensate for a poor forecasting process. Forecasting is not just about generating a number. Forecasters need to understand the problems they are trying to solve. They also need to follow a process that is justifiable to other parties and be implemented in practice. This is what the book is about. Accurate forecasts are essential for predicting demand, identifying new market opportunities, forecasting risks, disruptions, innovation, competition, market growth and trends. Companies can navigate this daunting landscape and improve their forecasts by following some well-established principles. This book is written to provide the fundamentals business leaders need in order to make good forecasts. These fundamentals hold true regardless of what is being forecast and what technology is being used. It provides the basic foundational principles all companies need to achieve competitive forecast accuracy.

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