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

Question

Quizplus · Accepted Answer

Long-run fluctuations in real GDP are unpredictable and do not follow a regular pattern, making it difficult to forecast with accuracy. Other factors such as technological innovations and demographic changes also make long-term forecasting difficult.

Why Is Forecasting GDP in the Long Run So Difficult