Growth: Now and Forever?

July 2, 2014

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

Forecasters often predict continued rapid economic growth into the medium and long term for countries that have recently experienced strong growth. Using long-term forecasts of economic growth from the IMF/World Bank staff Debt Sustainability Analyses for a panel of countries, we show that the baseline forecasts are more optimistic than warranted by past international growth experience. Further, by comparing the IMF’s World Economic Outlook forecasts with actual growth outcomes, we show that optimism bias is greater the longer the forecast horizon.

Subject: Banking, Debt sustainability analysis, Economic forecasting, External debt, National accounts, Output gap, Personal income, Production

Keywords: country, debt sustainability analysis, economic growth, economic growth forecast, forecast horizon, Global, growth forecast, growth rate, IMF definition, IMF engagement status, optimism bias, Output gap, per capita income, Personal income, standard deviation, Sub-Saharan Africa, teams' baseline forecast, Western Hemisphere, World Bank DSA exercise, WP

Pages:
27
Volume:
2014
DOI:
https://doi.org/10.5089/9781498309820.001
Issue:
117
Series:
Working Paper No. 2014/117
Stock No:
WPIEA2014117
ISBN:
9781498309820
ISSN:
1018-5941

IMF’s Work

RESOURCES

TOPICS

Flagship Publications

Other Publications

IMF reports and publications by country

Regional Offices

All News

See Also

For Journalists

Press Center

RESOURCES

FLAGSHIPS

KEY SERIES

IMF NOTES

Loading component...

IMF Working Papers