Why is forecasting GDP in the long run so difficult?
A)Structural and statistical forecasting provide differing results.
B)There is no regularity in the frequency and amplitude of fluctuations in real GDP.
C)Current models are not sophisticated enough to conduct this exercise.
D)There is no expertise in forecasting the long-run trend in real GDP.
E)These is an absence of data that provides any information on future trends.

Question

Quizplus · Accepted Answer

The long-run trend in GDP is affected by numerous factors such as demographics, productivity, and technology which make it difficult to predict the frequency and amplitude of fluctuations. This lack of regularity makes it challenging to forecast GDP in the long run accurately.

Why Is Forecasting GDP in the Long Run So Difficult