 A new consensus-based unemployment indicatorApplied Economics Letters, 2019, vol. 26, issue 10, 812-817 Abstract: In this study we present a novel approach to measure the level of consensus among agents’ expectations. The proposed framework allows us to design a positional indicator that gives the percentage of agreement between survey expectations. While other aggregation methods such as the balance, which is constructed as the difference between the percentages of respondents giving positive and negative replies, explicitly omit the neutral information, the proposed metric allows synthesizing the information coming from all response categories, including the percentage of respondents who do not expect any change. In order to assess the performance of the proposed measure of consensus, we compare its ability to track the evolution of unemployment to that of the balance in eight European countries. With this aim, we scale both measures to generate one-period ahead forecasts of the unemployment rate. We find that the consensus-based unemployment indicator outperforms the balance in all countries except Denmark and Sweden, which suggests that the level of agreement among agents’ expectations is a good predictor of unemployment. Date: 2019 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:apeclt:v:26:y:2019:i:10:p:812-817 Ordering information: This journal article can be ordered from DOI: 10.1080/13504851.2018.1497846 Access Statistics for this article Applied Economics Letters is currently edited by Anita Phillips More articles in Applied Economics Letters from Taylor & Francis Journals |
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