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4.1.2. Joint Economic Forecast
Since 1950, the Federal Ministry of Economic Affairs has commissioned leading
research institutes to produce the Joint Economic Forecast (JEF) on a bi-annual basis in
April and October in advance of the government projections. As outlined in Section 1.2, the
JEF exercise is an important reference for the preparation of the official Macroeconomic
Forecasts published in late April and October.
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The JEF covers international and German economic trends. The section on the German
economy contains an analysis of the current state of the economy, the most important
assumptions of the forecast and an annotated forecast of the key national accounting
components. In addition to independent forecasts, the JEF provides independent policy
recommendations on fiscal policy (e.g. tax policy) and economic policies (e.g. employment
policy, monetary policy) (European Commission, 2011). The JEF also contains a medium-
term forecast for developments over the coming five (spring) or six (autumn) years.
Until 2006, the same six institutes tended to participate in the JEF exercise.
Subsequently, the system has been changed to introduce a competitive tendering process
for three-year contracts. As a consequence, the groupings of institutes participating in the
JEF have changed several times and have even included institutes from other countries.
Typically, the institutes and the 60 or so economists that participate in the JEF on their
behalf represent a range of viewpoints across the mainstream of economic thinking.
Throughout the year, each institute also publishes its own forecasts separately from the
JEF. For the JEF, institutes continue to apply their own economic models and analytical
approaches in preparing the common forecast. The institutes meet to debate and fine-tune

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their results. The final JEF is a joint forecast, but also any irreconcilable differences can be
made public through minority opinions. In practice, minority opinions are rare.
Although the participating institutes are given access to some data that is not
published, in general they do not have a right of privileged access to government information.
The JEF has no direct influence on the budget and the budgetary procedure and the
government is not required to incorporate the results of the JEF when preparing its own
forecasts for the budget and stability programme, nor is it obliged to publically respond to
JEF reports. In practice, although the government forecasts can be characterised as slightly
pessimistic, they tend not to deviate significantly from those of the JEF. Given that the JEF
is considered to be of high quality and that it attracts significant media attention, major
differences in the government forecasts would pose a credibility risk. The government uses
the JEF in particular, but also forecasts from other international and national institutions,
as a basis to explain any differences that may arise. It should be noted that while the
independent forecasts of the JEF and the Council of Economic Experts are similarly well-
regarded, the weight of the JEF is somewhat higher due to the timing of its release which
allows it to access more up to date information.