Forecasting accuracy and system complexity

Abstract

Accurate forecasts are essential for a great number of applications yet large errors and considerable uncertainty characterize most of our attempts for predicting the future. This article surveys empirical studies on forecasting accuracy, summarizing their conclusions and examining the implications involved. It then discusses the effects of system complexity on forecasting accuracy and the related uncertainly while predicting future events. Finally, it provides suggestions for forecasting as accurately and realistically as possible when large and complex systems are involved.