OECD Economics Department Working Papers

ISSN :
1815-1973 (online)
DOI :
10.1787/18151973
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Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

 

How do the OECD Growth Projections for the G7 Economies Perform?

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Author(s):
Lukas Vogel1
Author Affiliations
  • 1: OECD, France

Publication Date
04 Sep 2007
Bibliographic information
No.:
573
Pages
33
DOI
10.1787/111804483765

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The quality of the OECD's Economic Outlook growth projections was last evaluated in-house at the peak of the previous business cycle, calling for a reassessment. This paper analyses the OECD's annual GDP growth projections for the G7 countries over the period 1991-2006 and compares them with the Consensus Economics forecasts. It shows that OECD growth projections display a number of desirable features: projections for the current year are unbiased and efficient; projection errors tend to shrink as the horizon shortens; and projections are directionally accurate most of the time. Like those produced elsewhere, the OECD projections also suffer from shortcomings: one-year-ahead projections display a positive bias, mainly reflecting a propensity to overpredict during slowdowns; spring one-year-ahead projections are far less informative than autumn ones; and turning points are poorly anticipated one year ahead. Regression tests suggest that the OECD and Consensus add value to naïve forecasts for spring current-year and autumn one-year-ahead projections.
Keywords:
growth, projections, forecasts, economic outlook, GDP
JEL Classification:
  • E17: Macroeconomics and Monetary Economics / General Aggregative Models / Forecasting and Simulation: Models and Applications
  • E27: Macroeconomics and Monetary Economics / Macroeconomics: Consumption, Saving, Production, Employment, and Investment / Forecasting and Simulation: Models and Applications
  • E37: Macroeconomics and Monetary Economics / Prices, Business Fluctuations, and Cycles / Forecasting and Simulation: Models and Applications