In recent years there have been extensive developments in the methods used in economic forecasting. This book presents an introduction to these methods for advanced undergraduate and postgraduate students of economics. We assume a background of intermediate economics and introductory econometrics. Part 1 is concerned with techniques. In chapter 1, a general introduction to forecasting methods is presented, and in chapter 2 recent advances in time-series methods are reviewed. Ways of combining forecasts are discussed in chapter 3. Part 2 is concerned with applications of these techniques in microeconomics (chapter 4), macroeconomics (chapter 5) and asset markets (chapter 6). The concluding chapter brings together some of the earlier results.

We are grateful to Peter Stoney, University of Liverpool, Paul de Grauwe, Catholic University of Leuven, David Byers, Michael Cain and David Law, University College, Aberystwyth for their comments on parts of the manuscript. Any errors and omissions are the responsibility of the authors. We acknowledge financial assistance from the Economic and Social Research Council (Grant B01250033) and Liverpool Polytechnic.