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An Evaluation of CBO Forecasts: Working Paper 2009-02

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  • Jon Huntley
  • Eric Miller

Abstract

We compare the performance of a subset of CBO's economic forecasts against that of an unrestricted vector autoregression (VAR) model. We evaluate forecasts of real economic indicators as well as budget-related nominal statistics. We find that under most specifications, the VAR performs competitively with, if slightly worse than, the corresponding CBO forecasts at up to 20 quarters. Therefore, a simple VAR is unlikely to be able to contribute directly to improving budget forecasts. The only series for which the VAR outperforms the CBO forecast is the growth in real

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  • Jon Huntley & Eric Miller, 2009. "An Evaluation of CBO Forecasts: Working Paper 2009-02," Working Papers 41195, Congressional Budget Office.
    • Handle: RePEc:cbo:wpaper:41195
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    File URL: https://www.cbo.gov/sites/default/files/111th-congress-2009-2010/workingpaper/2009-02_0.pdf
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    References listed on IDEAS

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