Dear Rathin,
At the Centre for Advanced Financial Research and Learning, the RBI, with a research associate in 2013, we tried to develop a tool for forecasting the economic cycles of India based on the well-known term structure slope analysis using wavelets in a duration model frame work. It used to work fine. There was nothing political in what we did. It was purely technical. Not that our forecasting tool was perfect, but it worked fine based on back testing, which does not mean that it would work going forward. My point is that it may be possible to develop tools to project growth purely statistically, at least, direction-wise, with no politics or explanation involved. Whether you buy the forecast or not is, of course, your subjective decision. But a simpler version of the tool worked for many advanced capitalist countries prior to their pegging the short end of the term structure to zero. Our wavelet decomposition was a way around. I would be happy to put you in touch with my former research associate, if you have any interest.
Best regards,
Sabri Oncu
Former Head of Research, CAFRAL, RBI
At the Centre for Advanced Financial Research and Learning, the RBI, with a research associate in 2013, we tried to develop a tool for forecasting the economic cycles of India based on the well-known term structure slope analysis using wavelets in a duration model frame work. It used to work fine. There was nothing political in what we did. It was purely technical. Not that our forecasting tool was perfect, but it worked fine based on back testing, which does not mean that it would work going forward. My point is that it may be possible to develop tools to project growth purely statistically, at least, direction-wise, with no politics or explanation involved. Whether you buy the forecast or not is, of course, your subjective decision. But a simpler version of the tool worked for many advanced capitalist countries prior to their pegging the short end of the term structure to zero. Our wavelet decomposition was a way around. I would be happy to put you in touch with my former research associate, if you have any interest.
Best regards,
Sabri Oncu
Former Head of Research, CAFRAL, RBI
