Professional Forecasters' View of Permanent and Transitory Shocks to GDP

Spencer Krane

American Economic Journal: Macroeconomics, 2011, vol. 3, issue 1, 184-211

Abstract: This paper examines how the professional forecasters comprising the Blue Chip Economic Consensus view shocks to GDP. I use an unobserved components model of the forecast revisions to identify forecasters' perceptions of permanent and transitory shocks to GDP. The model indicates forecasters: attribute about two-thirds of the variance in current-period revisions to permanent shocks; view the relative importance of permanent shocks similar to the estimates of some simple univariate econometric models; see high-frequency indicators of economic activity as being informative about both permanent and transitory shocks; and react to incoming data differently during periods of economic weakness. (JEL C51, C53, E23, E27, E32, E37)

JEL-codes: C51 C53 E23 E27 E32 E37 (search for similar items in EconPapers)
Date: 2011
Note: DOI: 10.1257/mac.3.1.184
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Citations: View citations in EconPapers (11)

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