The Accuracy of European Growth and Inflation Forecasts

Lars-Erik Öller and Bharat Barot ()

No 72, Working Paper from National Institute of Economic Research

Abstract: One-year-ahead forecasts by the OECD and by national institutes of GDP growth and inflation in 13 European countries are analysed. RMSE was large: 1.9 % for growth and 1.6 % for inflation. Six (11) OECD and 10 (7) institute growth forecast records were significantly better than an average growth forecast (the current year forecast). All full record-length inflation forecasts were significantly better than both naive alternatives. There was no significant difference in accuracy between the forecasts of the OECD and the institutes. Two forecasts were found to be biased and one had autocorrelated errors. Directional forecasts were significantly better than a naive alternative in one-half of the cases. Overall, inflation forecasts were significantly more accurate than growth forecasts, and in contrast to growth forecasts, they generally improved over time. This has implications for economic policy. Positively biased revisions reveal large errors in data.

Keywords: Forecast accuracy; Directional errors; Forecast tests (search for similar items in EconPapers)
Date: 2000-02-01
View list of references View citations in EconPapers

Downloads: (external link)
http://www.konj.se/download/18.2f48d2f18732142c7fff553/wp72.pdf (application/pdf)

Related works:
Journal Article: The accuracy of European growth and inflation forecasts (2000)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:hhs:nierwp:0072

Access Statistics for this paper

More papers in Working Paper from National Institute of Economic Research
Address: National Institute of Economic Research, P.O. Box 3116, SE-103 62 Stockholm, Sweden
Contact information at EDIRC.
Series data maintained by Britta Larsson ().