Inattentive professional forecasters

Philippe Andrade and Hervé Le Bihan

Journal of Monetary Economics, 2013, vol. 60, issue 8, 967-982

Abstract: Using the ECB Survey of Professional Forecasters to characterize expectations at the micro-level, we emphasize two new facts: forecasters (i) fail to systematically update their forecasts and (ii) disagree even when updating. It is moreover found that forecasters have predictable forecast errors. These facts are qualitatively supportive of recent models of inattention and suggest a setup where agents imperfectly process information due to both sticky information à la Mankiw–Reis, and noisy information à la Sims. However, building and estimating such an expectation model, we find that it cannot quantitatively replicate the error and disagreement observed in the data.

Keywords: Expectations; Imperfect information; Inattention; Forecast errors; Disagreement (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (295)

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Related works:
Working Paper: Inattentive professional forecasters (2010)
Working Paper: Inattentive Professional Forecasters (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:60:y:2013:i:8:p:967-982

DOI: 10.1016/j.jmoneco.2013.08.005

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