  Forecasting technological progress is of great interest to engineers, policy
makers, and private investors. Several models have been proposed for predicting
technological improvement, but how well do these models perform? An early
hypothesis made by Theodore Wright in 1936 is that cost decreases as a power
law of cumulative production. An alternative hypothesis is Moore's law, which
can be generalized to say that technologies improve exponentially with time.
Other alternatives were proposed by Goddard, Sinclair et al., and Nordhaus.
These hypotheses have not previously been rigorously tested. Using a new
database on the cost and production of 62 different technologies, which is the
most expansive of its kind, we test the ability of six different postulated
laws to predict future costs. Our approach involves hindcasting and developing
a statistical model to rank the performance of the postulated laws. Wright's
law produces the best forecasts, but Moore's law is not far behind. We discover
a previously unobserved regularity that production tends to increase
exponentially. A combination of an exponential decrease in cost and an
exponential increase in production would make Moore's law and Wright's law
indistinguishable, as originally pointed out by Sahal. We show for the first
time that these regularities are observed in data to such a degree that the
performance of these two laws is nearly tied. Our results show that
technological progress is forecastable, with the square root of the logarithmic
error growing linearly with the forecasting horizon at a typical rate of 2.5%
per year. These results have implications for theories of technological change,
and assessments of candidate technologies and policies for climate change
mitigation.
