Bananas and petrol: further evidence on the forecasting accuracy of the ABS ‘headline’ and ‘underlying’ rates of inflation

In the light of the still topical nature of ‘bananas and petrol’ being blamed for driving much of the inflationary pressures in Australia in recent times, the ‘headline’ and ‘underlying’ rates of inflation are scrutinised in terms of forecasting accuracy. A general structural time‐series modelling strategy is applied to estimate models for alternative types of Consumer Price Index (CPI) measures. From this, out‐of‐sample forecasts are generated from the various models. The underlying forecasts are subsequently adjusted to facilitate comparison. The Ashley, Granger and Schmalensee (1980) test is then performed to determine whether there is a statistically significant difference between the root mean square errors of the models. The results lend weight to the recent findings of Song (2005) that forecasting models using underlying rates are not systematically inferior to those based on the headline rate. In fact, strong evidence is found that underlying measures produce superior forecasts. Copyright © 2009 John Wiley & Sons, Ltd.     

The evolution of sales forecasting management: a 20‐year longitudinal study of forecasting practices

This paper presents results of a survey designed to discover how sales forecasting management practices have changed over the past 20 years as compared to findings reported by Mentzer and Cox (1984) and Mentzer and Kahn (1995). An up‐to‐date overview of empirical studies on forecasting practice is also presented. A web‐based survey of forecasting executives was employed to explore trends in forecasting management, familiarity, satisfaction, usage, and accuracy among companies in a variety of industries. Results revealed decreased familiarity with forecasting techniques, and decreased levels of forecast accuracy. Implications for managers and suggestions for future research are presented. Copyright © 2006 John Wiley & Sons, Ltd.     

Forecasting outcomes in spread betting markets: can bettors use ‘quarbs’ to beat the book?

In this paper, we examine a relatively novel form of gambling, spread (or index) betting that overlaps with practices in conventional financial markets. In this form of betting, a number of bookmakers quote bid–offer spreads about the result of some future event. Bettors may buy (sell) at the top (bottom) end of a spread. We hypothesize that the existence of an outlying spread may provide uninformed traders with forecasting information that can be used to develop improved trading strategies. Using data from a popular spread betting market in the United Kingdom, we find that the price obtaining at the market mid‐point does indeed provide a better forecast of asset values than that implied in the outlying spread. We further show that this information can be used to develop trading strategies leading to returns that are consistently positive and superior to those from noise trading. Copyright © 2005 John Wiley & Sons, Ltd.     

The ‘Popperian Programme’ and mathematics: Part II: From quasi-empiricism to mathematical research Programmes

In the first part of this article I investigated the Popperian roots of Lakatos's Proofs and Refutations, which was an attempt to apply, and thereby to test, Popper's theory of knowledge in a field—mathematics—to which it had not primarily been intended to apply. While Popper's theory of knowledge stood up gloriously to this test, the new application gave rise to new insights into the heuristic of mathematical development, which necessitated further clarification and improvement of some Popperian methodological maxims. In the present part I analyze this second phase in the development of Lakatos's Popperian programme in mathematics, and its connection to the methodology of scientific research programmes.     

Response to one point in Gingras’s review of Gravity’s shadow

Yves Gingras says of my book Gravity’s shadow that it is too long, the style is poor, and in its 870 pages there is nothing new that is not to be regretted. Gingras’s purity of vision would be a cause for congratulation were it not for the appalling implications of one of his claims. For the sake of the future of social science—indeed for the sake of the future of civilisation—it is impossible to leave unchallenged the idea that respondents, who don’t like to see their use of data questioned, are to be commended when they withhold those data from public scrutiny.     

Hermeneutical contributions to the history of science: Gadamer on ‘presentism’

This article examines how Hans G. Gadamer’s philosophical hermeneutics can contribute to contemporary debates on the concept of ‘presentism’. In the field of the history of science, this term is usually employed in two ways. First, ‘presentism’ refers to the kind of historiography which judges the past to legitimate the present. Second, this concept designates the inevitable influence of the present in the interpretation of the past. In this paper, I argue that both dimensions of the relationship between the present and the past are explored by Hans G. Gadamer in Truth and Method and other texts. In the first place, Gadamer’s critique of historicism calls into question the anti-presentist ideal of studying the past for ‘its own sake’. In the second place, Gadamer’s thesis that all understanding inevitably involves some prejudice poses the question of the inherent “present-centredness” of historical interpretations. By examining Gadamer’s hermeneutics, I seek to provide historians with new arguments and perspectives on the question of ‘presentism’.     

From centripetal forces to conic orbits: a path through the early sections of Newton’s Principia

In this study, we test the security of a crucial plank in the Principia’s mathematical foundation, namely Newton’s path leading to his solution of the famous Inverse Kepler Problem: a body attracted toward an immovable center by a centripetal force inversely proportional to the square of the distance from the center must move on a conic having a focus in that center. This path begins with his definitions of centripetal and motive force, moves through the second law of motion, then traverses Propositions I, II, and VI, before coming to an end with Propositions XI, XII, XIII and this trio’s first corollary. To test the security of this path, we answer the following questions. How far is Newton’s path from being truly rigorous? What would it take to clarify his ambiguous definitions and laws, supply missing details, and close logical gaps? In short, what would it take to make Newton’s route to the Inverse Kepler Problem completely convincing? The answer is very surprising: it takes far less than one might have expected, given that Newton carved this path in 1687.