There Will Be Growth in the Spring: How Credible are Forecasts of Recovery?

Abstract

Forecasters are currently echoing Chauncey Gardner’s words: “There will be growth in the spring.” Or certainly by the summer. Are such forecasts credible? Yes. This article presents evidence that private sector forecasters have done a reasonably good job of forecasting recoveries in industrialised countries over the 1990s. Since recessions in these countries have tended to last under a year, forecasting a recovery in the following year has turned out to be a pretty good bet. However, a few recessions do end up lasting longer than a year: when that happens, the evidence suggests that forecasters are caught flat-footed.