Are 16‐month‐ahead forecasts useful? A directional analysis of Japanese GDP forecasts

Past literature casts doubt on the ability of long‐term macroeconomic forecasts to predict the direction of change. We re‐examine this issue using the Japanese GDP forecast data of 37 institutions, and find that their 16‐month‐ahead forecasts contain valuable information on whether the growth rate accelerates or not. Copyright © 2006 John Wiley _ Sons, Ltd.