Medium term growth forecasts: Experts vs. simple models
J. Daniel Aromi
International Journal of Forecasting, 2019, vol. 35, issue 3, 1085-1099
Abstract:
We compare the medium-term GDP growth forecasts generated by experts to those generated by simple models. This study analyzes a large set of forecasts that covers 48 countries from 1997 to 2016. Out-of-sample exercises indicate that no noticeable difference in performance is observed for advanced economies. In contrast, in the case of emerging economies, model forecasts perform better than expert forecasts. In addition, similar patterns are found for a collection of forecasts from a different set of experts, which suggests that the reported regularity is prevalent. Further analyses suggest that the documented difference in performance can be explained by an optimism bias, excessive reactions to innovations in growth trajectories, and insufficient responses to the information contained in the current account balance.
Keywords: GDP forecasts; Emerging countries; Simple models; Overreaction; Forecast evaluation (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations:
Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0169207019300536
Full text for ScienceDirect subscribers only
Related works:
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: https://EconPapers.repec.org/RePEc:eee:intfor:v:35:y:2019:i:3:p:1085-1099
DOI: 10.1016/j.ijforecast.2019.03.004
Access Statistics for this article
International Journal of Forecasting is currently edited by R. J. Hyndman
More articles in International Journal of Forecasting from Elsevier
Bibliographic data for series maintained by Catherine Liu ().