Editing Economic forecasting (section)

===Forecast accuracy===

There are many studies on the subject of forecast accuracy. Accuracy is one of the main, if not the main, criteria used to judge forecast quality. Some of the references below relate to academic studies of forecast accuracy. Forecasting performance appears to be time-dependent, where some exogenous events affect forecast quality. As expert forecasts are generally better than market-based forecasts, forecast performance depends on several factors: model, political economy ([[terrorism]]), financial stability etc.

In early 2014 the OECD carried out a self-analysis of its projections.<ref>[http://www.oecd.org/economy/oecd-forecasts-during-and-after-the-financial-crisis-a-post-mortem.htm OECD forecasts during and after the financial crisis: a post mortem]</ref> "The OECD also found that it was too optimistic for countries that were most open to trade and foreign finance, that had the most tightly regulated markets and weak banking systems" according to the Financial Times.<ref>{{Cite web |last=Giles |first=Chris |date=2014-02-11 |title=OECD admits to forecasting errors during eurozone crisis |url=https://www.ft.com/content/a4b1e3aa-9320-11e3-8ea7-00144feab7de |url-access=subscription |access-date=2023-02-12 |website=[[Financial Times]]}}</ref>

In 2012 Consensus Economics launched its Forecast Accuracy Award, and each year publishes a list of winners who have most accurately predicted the final outcome of GDP and CPI for the prior year for over 40 countries. [https://www.consensuseconomics.com/cf-2020-forecast-accuracy-award-winners/ "Consensus Economics Forecast Accuracy Award"]

In recent years, research has demonstrated that behavioral biases play a significant role in affecting the accuracy of forecasts. The education and working experience of forecasters influence the accuracy and boldness of their predictions.<ref>{{cite journal |last1=Benchimol |first1=Jonathan |last2=El-Shagi |first2=Makram |last3=Saadon |first3=Yossi |year=2022 |title=Do Expert experience and characteristics affect inflation forecasts? |journal=Journal of Economic Behavior & Organization |publisher=Elsevier |volume=201 |issue=C |pages=205–226 |issn=0167-2681 |doi=10.1016/j.jebo.2022.06.025 |s2cid=229274267 }}</ref> Forecasting accuracy is also impacted by the forecaster's experience with high inflation rates.<ref>{{cite journal |last1=Malmendier |first1=Ulrike |last2=Nagel |first2=Stefan |year=2016 |title=Learning from Inflation Experiences |journal=Quarterly Journal of Economics |publisher=Oxford University Press |volume=131 |issue=1 |pages=53–87 |doi=10.1093/qje/qjv037 |doi-access=free }}</ref> Additionally, political events such as terrorism have been shown to influence the accuracy of both expert- and market-based forecasts of inflation and exchange rates.<ref>{{cite journal |last1=Benchimol |first1=Jonathan |last2=El-Shagi |first2=Makram |year=2020 |title=Forecast performance in times of terrorism |journal=Economic Modelling |publisher=Elsevier |volume=91 |issue=C |pages=386–402 |issn=0264-9993 |doi=10.1016/j.econmod.2020.05.018 }}</ref> This highlights the range of external factors and biases that should be considered when evaluating the accuracy of forecasts and making informed decisions.