The Fan Chart: The Technical Details of the New Implementation
La serie Borradores de Economía es una publicación de la Subgerencia de Estudios Económicos del Banco de la República. Los trabajos son de carácter provisional, las opiniones y posibles errores son responsabilidad exclusiva del autor y sus contenidos no comprometen al Banco de la República ni a su Junta Directiva.
Our current implementation of the Fan Chart follows the original Britton Fisher and Whitley [2] and Blix and Sellin [1] proposal in which the inputs enter at the fourth and ninth quarters and are distributed within the forecasting horizon according to pre established weights. This procedure does not allow enough flexibility to control the shape of the distribution at the shorter end of the horizon when more reliable information is available. On the other hand, no published material presents the details of the Fan Chart computation. In this note all the technical details of the new implementation are described. This implementation provides more flexibility than the previous one since it permits the inputs to be entered on a quarterly basis instead of on a yearly basis. Click here to obtain a Visual Basic for Excel implementation and save the file as FanChart.xls.
The author indebts very much Matteo Ciccarelli from the European Central Bank for pointing out a typo in the previous implementation. However, any remaining errors as well as the results and opinions contained in this paper are the sole responsibility of its author and do not compromise Banco de la República, its board of governors or the Universidad Nacional de Colombia.
