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A look at the historical data on forecasts made by the IMF in its World Economic Outlook (WEO) reports seems to suggest that optimism bias may be the bigger culprit.

1. The large negative forecast errors in the recession years skewed the historical averages.
2. Over the past few years, the forecasts made by the International Monetary Fund (IMF) have displayed one consistent pattern.
3. The forecasts are rosy at the start of the year, then revised downwards towards the end of the year, and the actual estimates of real growth turn out to be even lower.
4. Is predicting the fate of the global economy become more difficult in a volatile post-crisis world, or does the IMF suffer from an inherent optimism bias?

Correct answer: The forecasts are rosy at the start of the year, then revised downwards towards the end of the year, and the actual estimates of real growth turn out to be even lower.

Solution

The given sentence says historical data suggests optimism bias is the main issue. Option (C) directly explains this by describing forecasts that start optimistic, are revised downward, and still end up too high. This matches the idea of optimism bias best.

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