Abstract
The OECD produces two–year–ahead growth forecasts for the G7–countries since 1987; these forecasts have never been evaluated. A regression is developed that tests for the information content of the forecasts. The idea is that this content is the added value forecasters incorporate in their forecasts. The information content is defined relative to the forecast for the previous year. In the end, the added value contained in the current year forecast is calculated relative to the last observation. The test consists in checking whether the information content reduces the forecasts error. 1 The authors of the present study refer to Mincer and Zarnowitz (1969), McNees (1988), Stekler (1991) and Fildes and Stekler (2002) for a discussion of the evaluation techniques of forecasts. The study begins with a calculation of the usual accuracy statistics. These indicate an extreme low quality for the forecasts. The regression tests support this conclusion although the forecasts for Japan do possess some information. Alarming for users of forecasts is that there are no obvious alternatives.
Published Version
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