Evaluating the Usefulness of Forecasts of Relative Growth

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Abstract

Forecasts of differences in growth between countries serve an important role in the justification of governments’ fiscal policy stances, but are not tested for their accuracy as part of the current range of forecast evaluation methods. This paper examines forecasted and outturn growth differentials between countries to identify if there is usefulness in forecasts of “relative” growth. Using OECD forecasts and outturn values for GDP growth for (combinations of) the G7 countries between 1984 and 2010, the paper finds that the OECD’s success in predicting the relative growth of G7 countries during this period is good. For each two-country combination results indicate that relative growth forecasts are less useful for countries which have smaller outturn growth differentials.
Original languageEnglish
Place of PublicationGlasgow
PublisherUniversity of Strathclyde
Pages1-26
Number of pages28
Volume12
Publication statusPublished - May 2012

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Keywords

  • macroeconomic forecast evaluation
  • relative forecast accuracy
  • oecd

Cite this

Allan, G. J. (2012). Evaluating the Usefulness of Forecasts of Relative Growth. (14 ed.) (pp. 1-26). Glasgow: University of Strathclyde.