One forecaster generally outperformed another when evaluating the accuracy of real gross domestic product (GDP) growth expectations among forecasting organizations for individual economies, but the differences are often not "statistically significant," according to a research discussion paper released by the Reserve Bank of Australia on Monday.
The researchers studied the properties of real GDP forecasts by four international organizations, comprising the International Monetary Fund, the World Bank, the European Commission and the Organization for Economic Cooperation and Development.
The findings suggest that the differences may result from chance rather than indicate better forecasting ability.
Conversely, the researchers found statistically significant deviations from forecast rationality for each forecaster, with common reasons including optimistic bias, excessive revisions, and extreme forecasts.
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