To tell the truth or the perceived truth: Structural estimation of peer effects in China’s macroeconomic forecast

Linke Hou, Yuxia Lv, Hao Geng and Feiyue Li

Economic Systems, 2019, vol. 43, issue 2, -

Abstract: This study investigates the strategic interactions among China’s professional macroeconomic forecasters in the context of a static game with incomplete information. Professional forecasters attempt to be more precise than their peers when they are uncertain about others’ ability to forecast, given their own ability to forecast macroeconomy. We then empirically estimate the peer effects using the two-step method proposed by Bajari et al. (2010). The results identify a pronounced peer effect among professional forecasters and specify the asymmetric peer effect exerted by prominent professional forecasters. The results remain valid through several robustness checks. The forecast customers must thus address the peer effects due to competition among professional forecasters when they use forecasting reports.

Keywords: Macroeconomic forecast; Static game; Peer effect; Structural estimation (search for similar items in EconPapers)
JEL-codes: C72 E17 O53 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecosys:v:43:y:2019:i:2:9

DOI: 10.1016/j.ecosys.2019.100691

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