Outside the box: using synthetic control methods as a forecasting technique

We introduce synthetic control methods (SCM) as a forecasting technique. Using (i) as economic predictors solely the outcome itself, i.e. lagged values of the dependent variable, and (ii) lagged time series of the outcome to build the donor pool, we let SCM choose and weight appropriate values in order to come up with a sensible forecast of the US GDP growth. This procedure performs competitively viable compared with alternative forecasting methods.