Projecting the Medium-Term: Outcomes and Errors for GDP Growth

Marcus Kappler

No 07-068, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: The focus of this paper is the evaluation of a very popular method for potential output estimation and medium-term forecasting? the production function approach?in terms of predictive performance. For this purpose, a forecast evaluation for the three to five years ahead predictions of GDP growth for the individual G7 countries is conducted. To carry out the forecast performance check a particular testing framework is derived that allows the computation of robust test statistics given the specific nature of the generated out-of sample forecasts. In addition, medium-term GDP projections from national and international institutions are examined and it is assessed whether these projections convey a reliable view about future economic developments and whether there is scope for improving their predictive content.

Keywords: Potential output; projections; forecast evaluation (search for similar items in EconPapers)
JEL-codes: C53 E23 E27 (search for similar items in EconPapers)
Date: 2007
New Economics Papers: this item is included in nep-for and nep-hap
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:6888

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