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| Topic: |
Business
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| Number of pages / Number of words: |
10 / 2590 |
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The CBO's evaluation uses the mean error (the arithmetic average of the forecast errors) to measure any statistical bias that appears in the office's forecast. The CBO explains that forecasters tend to err in their forecasts during periods that include either turning points in the business cycle or significant shifts in the trend rate of productivity growth (CBO's economic forecasting record, 2004)...
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The CBO's forecasting history can be reviewed at http://www.cbo.gov.
Not surprisingly, the CBO does not use a single economic model, such as monetarist or Keynesian, in forecasting one of the largest and perhaps the most complex economies in history, the U.S. economy. In making 10-year projections, the CBO takes into consideration current law, federal tax implications, and government spending trends (Description of economic models, 1998)...
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