Short-run macroeconomic forecasting: The OECD performance

✍ Scribed by David J. Smyth

• Publisher: John Wiley and Sons
• Year: 1983
• Tongue: English
• Weight: 664 KB
• Volume: 2
• Category: Article
• ISSN: 0277-6693
• DOI: 10.1002/for.3980020105

✦ Synopsis

Forecasts for the seven major industrial countries, Canada, France, Germany, Italy, Japan, the United Kingdom and the United States, are published on a regular basis in the OECDs Economic Outlook. This paper analyses the accuracy of the OECD annual forecasts of output and price changes and of thecurrent balance in the balance of payments. As a reference basis, the forecasts are compared with those generated by a naive model, a random walk process. The measures of forecasting accuracy used are the mean-absolute error, the root-mean-square error, the median-absolute error, and Theil's inequality coefficient. The OECD forecasts of real G N P changes are significantly superior to those generated by the random walk process: however, the OECD price and current balance forecasts are not significantly more accurate than those obtained from the naive model. The OECDs forecasting performance has neither improved nor deteriorated over time.