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Firm performance and macro forecast accuracy

Mari Tanaka, Nicholas Bloom (), Joel David () and Maiko Koga

Journal of Monetary Economics, 2020, vol. 114, issue C, 26-41

Abstract: Combining a unique survey of Japanese firms’ GDP forecasts with accounting data for 25 years, we find three main results. First, firms’ GDP forecasts are associated with their employment, investment, and output growth in the subsequent year. Second, over optimistic and pessimistic forecast errors predict lower profitability and productivity, consistent with our model of input choice under uncertainty. Third, larger and more cyclical firms make forecasts closer to professionals, presumably reflecting their higher return to accuracy. Forecasts by more productive and older firms are also more similar to professional forecasts, implying forecasting ability is linked to management ability and experience.

Keywords: Forecasting; Investment; Employment; Productivity (search for similar items in EconPapers)
Date: 2020
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Related works:
Working Paper: Firm Performance and Macro Forecast Accuracy (2018) Downloads
Working Paper: Firm Performance and Macro Forecast Accuracy (2018) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:114:y:2020:i:c:p:26-41

DOI: 10.1016/j.jmoneco.2019.02.008

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