What Factors Have Affected the Forecast Errors of the International Monetary Fund?A Political Economy Analysis
Xiong Aizong;Institute of World Economics and Politics,Chinese Academy of Social Sciences;
Providing high-quality economic forecasts is an important mandate of theInternational Monetary Fund( IMF) and an important means of maintaining world financial and economic stability. However,influenced by many factors,the IMF's economic forecasts on member counties are inevitably biased. This paper establishes a political economy framework to analyze the IMF forecast errors from the forecasting methods,the forecasting information and the political factors,and tests the influence of different factors on the IMF forecast through the panel data analysis. The study concludes that the IMF tends to make optimistic economic forecasts for countries that implement IMF-supported programs,and this economic forecasts bias is particularly evident in advanced economies. At the same time,we find countries voting with the United States in the UN General Assembly receive more optimistic forecasts from the IMF. However,the direct political influence of the country on the IMF has no significant impact on the forecast error. In addition,this paper also tests the effects of the data availability on the quality of forecasts using the IMF's Special Data Dissemination Standard( SDDS) and the World Bank's Statistical Capacity Indicator( SCI),and finds that improving the data availability of member countries is beneficial to improving the IMF's forecast accuracy. The IMF's forecast errors for major economies can also affect a country's forecast. Therefore,the paper proposes to further improve the quality of the IMF's forecast by establishing more independent forecasting procedures,improving the quality of forecast data and improving the IMF's forecast accuracy for major economies.
【CateGory Index】： F821