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Information rigidities: Comparing average and individual forecasts for a large international panel

Jonas Dovern (), Ulrich Fritsche (), Prakash Loungani () and Natalia Tamirisa ()

International Journal of Forecasting, 2015, vol. 31, issue 1, 144-154

Abstract: We study forecasts of real GDP growth using a large panel of individual forecasts from 36 advanced and emerging economies over the period 1989–2010. We show that the degree of information rigidity in average forecasts is substantially higher than that in individual forecasts. Individual-level forecasts are updated quite frequently, a behavior which is more in line “noisy” information models (Woodford, 2002; Sims, 2003) than with the assumptions of the sticky information model (Mankiw & Reis, 2002). While there are cross-country variations in information rigidity, there are no systematic differences between advanced and emerging economies.

Keywords: Rational inattention; Aggregation bias; Growth forecasts; Information rigidity; Forecast behavior (search for similar items in EconPapers)
Date: 2015
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Related works:
Working Paper: INFORMATION RIGIDITIES: COMPARING AVERAGE AND INDIVIDUAL FORECASTS FOR A LARGE INTERNATIONAL PANEL (2014) Downloads
Working Paper: Information Rigidities; Comparing Average and Individual Forecasts for a Large International Panel (2014) Downloads
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