Econometric models are a widely used and powerful tool in macroeconomic analysis and forecasting. Admittedly, their acceptance by the scientific community has had some hard times during the seventies and eighties: a general decline in the reputation of macroeconomics, the Lucas critique, and...

The major focus of this paper is to determine whether the accuracy of German macroeconomic forecasts has improved over time. We examine 1-year-ahead forecasts of real GDP and inflation for 1967 to 2001 made by three major German forecasting groups and the OECD. We examine the accuracy of the...

Despite manifold efforts, accuracy of macroeconomic forecasts has not improved since the 1970s. Therefore, (some) economists demand more competitionʺ among forecasting institutions, hoping that allocative efficiency of market solutions holds in the field of macroeconomic forecasts, too....