IS A GROUP OF ECONOMISTS BETTER THAN ONE - THAN NONE

Can economists forecast the direction of economic growth? Casual obser vation indicates that individual economists make poor predictions of e conomic growth and that their forecasts are highly correlated. This ar ticle discusses the loss of information resulting from correlation and develops a method of combining forecasts that are cross-sectionally c orrelated. This approach greatly increases the accuracy of near-term f orecasts of the direction of economic growth, although the individual with the best historical performance is better over longer horizons. O verall, when the data are properly aggregated, economists predict the direction of near-term economic growth and call turning points reasona bly well.