The Wall Street Journal panel of economists: How did they do in predicting economic growth in a time of pandemic?

The Covid- 19 pandemic was an unexpected shock to the U.S. economy, which made the already fraught task of forecasting economic activity even harder. This paper investigates how forecasts of real GDP growth from a monthly survey of professional economists conducted by the Wall Street Journal evolved over 2020 as the economic repercussions of the pandemic grew. We document how the economists initially underestimated the size of the economic contraction initiated by the pandemic and then underestimated the size of the ensuing economic recovery until after it had occurred. We also document how the economists' forecasting errors evolved over the year as they revised their predictions in response to incoming economic data. We suggest that forecasters underestimated the recovery in 2020III due, in part, to the unprecedented sizes of the fiscal stimulus and the mobility constraints imposed by the pandemic. fraught task of forecasting economic activity even harder. This paper investigates how forecasts of real GDP growth from a monthly survey of professional economists conducted by the Wall Street Journal evolved over 2020 as the economic repercussions of the pandemic grew. We document how the economists initially underestimated the size of the economic contraction initiated by the pandemic and then underestimated the size of the ensuing economic recovery until after it had occurred. We also document how the economists' forecasting errors evolved over the year as they revised their predictions in response to incoming economic data. We suggest that forecasters underestimated the recovery in 2020III due, in part, to the unprecedented sizes of the fiscal stimulus and the mobility constraints imposed by the pandemic.