Optimal forecasts fall short: Stick to exponential transformation for accuracy.
The article discusses how to forecast levels of variables in time series when the variables are in logarithmic form. The researchers found that simply converting the log forecast to the original variable using exponential transformation is not always the best approach. They derived an optimal forecast under certain assumptions, but in real-world scenarios with uncertainty, using the exponential of the log forecast is actually more effective than the optimal forecast.
