Has output become more predictable?: changes in greenbook forecast accuracy
Federal Reserve Board, Divisions of Research & Statistics and Monetary Affairs, 2005 - Business & Economics - 28 pages
Several researchers have recently documented a large reduction in output volatility. In contrast, this paper examines whether output has become more predictable. Using forecasts from the Federal Reserve Greenbooks, the author finds evidence somewhat mixed. Output seems to have become more predictable at short horizons, but not necessarily at longer horizons. The reduction in unpredictability is much less than the reduction in volatility. Associated with this, recent forecasts had little predictive power.
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