Global growth declined from 5.4 per cent in 2010 to 3.3 per cent in 2013. This slowdown came as a complete surprise to the IMF, which admits in its latest World Economic Outlook that even though there were some unforecastable shocks (the Japanese tsunami for one) “global growth outturns have still surprised on the downside relative to each successive WEO forecast since 2011”.
Why, it asks, did it get it wrong again and again? This is some optimism bias.
Continue reading: MoneySupply: IMF getting it wrong again and again