The Reserve Bank of Australia has published a research discussion paper examining the accuracy and rationality of real gross domestic product growth forecasts produced by international organizations and the private sector. The study uses a large dataset covering forecasts from the International Monetary Fund, World Bank, European Commission and Organisation for Economic Co-operation and Development. The paper introduces a decomposition that attributes differences in forecast accuracy to forecaster disagreement and the accuracy of the average forecast. It also presents theoretical and empirical analysis of how conditioning assumptions and the use of modal forecasts may explain why forecasts fail tests of rationality.
2026-09-21Reserve Bank of Australia
Reserve Bank of Australia publishes study of real GDP forecast accuracy and rationality
The Reserve Bank of Australia has published research comparing the accuracy and rationality of real GDP growth forecasts from four international organizations and the private sector. The paper introduces a new decomposition of forecast accuracy and examines conditioning assumptions and modal forecasts as possible explanations for failures of forecast rationality.