An Evaluation of the World Economic Outlook Forecasts
IMF Working Papers, March 1, 2006
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- An Evaluation of the World Economic Outlook Forecasts
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Bibliographic details
- Authors: Allan Timmermann
- Published: March 1, 2006
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451863192.001
Objective and scope
- Evaluates the quality of the World Economic Outlook (WEO) forecasts for a very large cross section of countries, with particular emphasis on the recent recession and recovery.
- Assesses whether forecasts were unbiased and informationally efficient.
- Characterizes how WEO forecasts get revised as the time to the point of the forecast draws closer.
- Examines whether forecasts can be improved by combining WEO forecasts with the Consensus forecasts.
Methods
- Conducts a series of statistical tests applied to WEO forecasts across many countries and variables.
- Compares WEO forecast performance against actual outcomes and alternative forecasts (specifically the Consensus forecasts).
- Analyzes forecast bias, informational efficiency, and revision dynamics as the forecast horizon shortens.
Key findings
- The performance of the WEO forecasts is similar to that of the Consensus forecasts.
- WEO forecasts for many variables in many countries meet basic quality standards in some, if not all, dimensions.
- The analysis raises a number of concerns with current forecasting performance (concerns noted but not enumerated in the overview).
- The paper documents the process of forecast revision as the time to the forecasted point draws closer.
- Combining WEO forecasts with Consensus forecasts is assessed as a potential means to improve forecasts.
Subject areas and keywords
- Subject: Current account, Current account balance, Economic forecasting, GDP forecasting, Inflation
- Keywords: mover accent, WP