An Evaluation of the World Economic Outlook Forecasts

March 1, 2006

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Format: Chicago

Allan Timmermann. An Evaluation of the World Economic Outlook Forecasts, (USA: International Monetary Fund, 2006) accessed September 18, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

The World Economic Outlook (WEO) is a key source of forecasts of global economic conditions. It is therefore important to review the performance of these forecasts against both actual outcomes and alternative forecasts. This paper conducts a series of statistical tests to evaluate the quality of the WEO forecasts for a very large cross section of countries, with particular emphasis on the recent recession and recovery. It assesses whether forecasts were unbiased and informationally efficient, and characterizes the process whereby WEO forecasts get revised as the time to the point of the forecast draws closer. Finally, the paper assess whether forecasts can be improved by combining WEO forecasts with the Consensus forecasts. The results suggest that the performance of the WEO forecasts is similar to that of the Consensus forecasts. While WEO forecasts for many variables in many countries meet basic quality standards in some, if not all, dimensions, the paper raises a number of concerns with current forecasting performance.

Subject: Current account, Current account balance, Economic forecasting, GDP forecasting, Inflation

Keywords: Mover accent, WP

Publication Details

Pages:

108
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2006/059
Stock No:

WPIEA2006059
ISBN:

9781451863192
ISSN:

1018-5941

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