Eric Blair's forecast from the 1940's called for a 1984 international political economy with constant war between three global powers, designed to use up resources otherwise so abundant that the masses would be free to reflect on, and consequently depose, the bureaucratic elite (George Orwell, 1949). Orwell's forecast was wrong, although perhaps in part only because it was a self-negating prophecy: one that induces corrective measures. Undoubtedly the most successful long-term economic forecast was Joseph's prediction to the Pharaoh of the fourteen-year agrarian business cycle. Others with less privileged information have fared less well. A founder of our own profession, Malthus, erroneously predicted long-term stagnation at the subsistence level, because he underestimated technical change (although for Sub-Saharan Africa and parts of South Asia, the Malthusian projection appears closer to the mark). This essay reviews long-term forecasts from the last several decades in the area of international economics, to see whether patterns can be distinguished in their success or failure.

[The accuracy of forecasts of one-year-ahead current cost earnings using four component models is examined. ASR 190 data for 1976 to 1978 and FAS 33 data for 1979 to 1981 are used in calculating current cost earnings for a sample of 129 firms. The component forecasting models also incorporate forecasts of certain components of historical cost net income developed by Value Line financial analysts. The forecast accuracy of the component models is compared to four benchmark models. A component model that incorporates analysts' forecasts of sales and changes in (historical cost) margins provides the most accurate forecasts for the aggregate sample and for two subsamples. It also provides similar or more accurate forecasts than the other models in eight of the nine industries examined. Thus, researchers may consider using this model when examining the incremental information content of current cost earnings vis-a-vis that of historical cost earnings.]