Growth: Now and Forever?

Giang Ho and Paolo Mauro

No 2014/117, IMF Working Papers from International Monetary Fund

Abstract: Forecasters often predict continued rapid economic growth into the medium and long term for countries that have recently experienced strong growth. Using long-term forecasts of economic growth from the IMF/World Bank staff Debt Sustainability Analyses for a panel of countries, we show that the baseline forecasts are more optimistic than warranted by past international growth experience. Further, by comparing the IMF’s World Economic Outlook forecasts with actual growth outcomes, we show that optimism bias is greater the longer the forecast horizon.

Keywords: WP; economic growth; country; growth rate; economic growth forecast; growth forecast; optimism bias; forecast horizon; debt sustainability analysis; World Bank DSA exercise; IMF engagement status; teams' baseline forecast; per capita income; IMF definition; standard deviation; Personal income; Output gap; Western Hemisphere; Sub-Saharan Africa; Global (search for similar items in EconPapers)
Pages: 27
Date: 2014-07-02
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Citations: View citations in EconPapers (13)

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Journal Article: Growth—Now and Forever? (2016)
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