Adaptive Forecasting of Exchange Rates with Panel Data

This article investigates the statistical and economic implications of adaptive forecasting of exchange rates with panel data and alternative predictors. The candidate exchange rate predictors are drawn from (i) macroeconomic 'fundamentals', (ii) return/volatility of asset markets and (iii) cyclical and confidence indices. Exchange rate forecasts at various horizons are obtained from each of the potential predictors using single market, mean group and pooled estimates by means of rolling window and recursive forecasting schemes. The capabilities of single predictors and of adaptive techniques for combining the generated exchange rate forecasts are subsequently examined by means of statistical and economic performance measures. The forward premium and a predictor based on a Taylor rule yield the most promising forecasting results out of the macro 'fundamentals' considered. For recursive forecasting, confidence indices and volatility in-mean yield more accurate forecasts than most of the macro 'fundamentals'. Adaptive forecast combinations techniques improve forecasting precision and lead to better market timing than most single predictors at higher horizons.exchange rate forecasting; panel data; forecast combinations; market timing

Mega-City-Regions: on Awareness and Value Chain Approach

Mega-City-Regions (MCR) as a new large-scale urban phenomenon have been gaining attention recently: In research, empirical studies address their functional consistency, and spatial planning policies underline the strategic role of MCRs for territorial competition of a country. But increasingly a tension between the functional logic of knowledge-intensive business activities and the territorial and normative approaches of public bodies begin to emerge. Typical conflicts of spatial development in MCRs occur for example when globally motivated investment decisions hit upon the local needs. This paper proposes an integrated view that can help to bridge the gap between the growing factual knowledge about MCRs and the still weak ability to use this knowledge for local and regional development and spatial planning purposes. The proposed integration draws on the one hand from the corporate-based value chain approach: The interaction of analysis of spatio-economic development, its adequate visualization and focussed communication towards stakeholders is apt to bring about the initiating momentum for beneficial spatial development. In the context of a diffuse perception of MCRs – whose mere size surpasses our common notions of space – analysis, visualization and communication as methodological components in the spatial planning process add value to sustainable spatial development. The process starts with creating awareness for the often invisible and complex functions, qualities and identities of the MCR spatial scale. New strategies of visualization and communication are needed to improve insight and motivation of the actors involved. On the other hand this value chain approach has to be adapted to the varying vertical levels of public bodies with their numerous policies. Thus, “multi-level-governance†is to be conceived as a concept to close the gap between the territorial and the functional logic of spatial development. The paper will study this dual approach with the case of the announced expansion of the international airport in Munich. This complex multi-level-governance process experiments with a consensus-oriented dialogue platform – the so called “neighbourhood conference†(NC) – bringing together actors with divers responsibilities and objectives. The NC sits at the interface of global and local objectives that are transformed on the spatial scale of the MCR of Munich. The paper concludes with recommendations for using the above described spatial value chain approach for more efficient multi-level-governance.