Long-term forecasting and evaluation

Looking ahead thirty years is a difficult task, but is not impossible. In this paper we illustrate how to evaluate such long-term forecasts. Long-term forecasting is likely to be dominated by trend curves, particularly the simple linear and exponential trends. However, there will certainly be breaks in their parameter values at some unknown points, so that eventually the forecasts will be unsatisfactory. We investigate whether or not simple methods of long-run forecasting can ever be successful, after one takes into account the uncertainty level associated with the forecasts.