How Accurate Are Professional Economic Forecasts?

Abstract

This paper examines the forecast accuracy of the ASA-NBER survey annual data on seven major macroeconomic indicators for 1983-1991. Although no single forecaster was consistently accurate, it is generally shown that (i) the average forecast error is reasonably low, (ii) the forecast accuracy and the forecasters agreement on their man forecast improve as the forecast horizon becomes shorter, and (iii) the consensus of professional forecasts is superior to the nae forecast.