Skip to content
Subscribe
Notify of
1 Comment
Oldest
Newest
Inline Feedbacks
View all comments
AKguy
17 years ago

From the BLS site:
“The

From the BLS site:

“The most significant potential drawback to this or any model-based approach is that time series modeling assumes a predictable continuation of historical patterns and relationships and therefore is likely to have some difficulty producing reliable estimates at economic turning points or during periods when there are sudden changes in trend. BLS will continue researching alternative model-based techniques for the net birth/death component; it is likely to remain as the most problematic part of the estimation process.”

…found at:

http://www.bls.gov/web/cesbd.htm

So the model is pretty detached from the real world, in that it doesn’t model “economic turning points” or “sudden changes in trend”. It’s like predicting summer weather in Florida based on a trend of sunny, warm days. Oops, sorry about that hurricane, couldn’t have predicted that…