Our website will undergo scheduled maintenance on the morning of Thursday, August 11, 2022. During this time, connection to our website and some of its features may be unavailable. Thank you for your patience and we apologize for any inconvenience.

Journal Article

To Improve the Accuracy of GDP Growth Forecasts, Add Financial Market Conditions

Abstract: More timely data on current macroeconomic conditions can reduce uncertainty about forecasts, helping policymakers mitigate the risk of extreme economic outcomes. We find that incorporating financial market conditions along with current macroeconomic conditions improves the forecast accuracy of future GDP growth. Forecasts based only on current macroeconomic conditions eventually converge to those incorporating financial market conditions, lending further support to this approach.

Keywords: GDP; Forecasts; Financial markets;

JEL Classification: D53; E44; E47;

Access Documents

File(s): File format is application/pdf https://www.kansascityfed.org/documents/8119/eb21cookdoh0602.pdf
Description: Full text


Bibliographic Information

Provider: Federal Reserve Bank of Kansas City

Part of Series: Economic Bulletin

Publication Date: 2021-06-02

Issue: June 2, 2021

Pages: 5