Forecasting the world economy in the short-term

Forecasting the world economy is a di¢ cult task given the complex interre-lationships within and across countries. This paper proposes a number ofapproaches to forecast short-term changes in selected world economic vari-ables and aims, …rst, at ranking various forecasting methods in terms offorecast accuracy and, second, at checking whether methods forecasting di-rectly aggregate variables (direct approaches) outperform methods based onthe aggregation of country-speci…c forecasts (bottom-up approaches). Over-all, all methods perform better than a simple benchmark...