(This article was originally published at No Hesitations, and syndicated at StatsBlogs.)
The two graphs below, one from Deutsche Bank for the U.S. 10-year bond yield and one from the IMF for global real GDP growth, speak for themselves. Forecasting through large structural change is always difficult; maybe the means to which the forecasts should revert have now shifted lower. On the other hand, it's not obvious that we are experiencing a large structural change -- maybe we were just hit by a long and unlikely sequence of negative shocks, and the mean reversion embedded in the forecasts was ex ante rational even if ex post incorrect. 
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Tags: Bond Yields, forecasting
