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Disagreement Among Forecasters in G7 Countries

Jonas Dovern (), Ulrich Fritsche () and Jiri Slacalek ()

The Review of Economics and Statistics, 2012, vol. 94, issue 4, 1081-1096

Abstract: We investigate determinants of disagreement—cross-sectional dispersion of individual forecasts—about key economic indicators. Disagreement about economic activity, in particular about GDP growth, has a distinct dynamic from disagreement about prices: inflation and interest rates. Disagreement about GDP growth intensifies strongly during recessions. Disagreement about prices rises with their level, declines under independent central banks, and both its level and its sensitivity to macroeconomic variables are larger in countries where central banks became independent only around the mid-1990s. Our findings suggest that credible monetary policy contributes to anchoring of expectations about inflation and interest rates. Disagreement for both groups of indicators increases with uncertainty about the actual series. © 2012 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Keywords: disagreement; survey expectations; monetary policy; forecasting; G7 countries (search for similar items in EconPapers)
JEL-codes: E31 E32 E37 E52 C53 (search for similar items in EconPapers)
Date: 2012
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Working Paper: Disagreement among forecasters in G7 countries (2009) Downloads
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The Review of Economics and Statistics is currently edited by Amitabh Chandra, Olivier Coibion, Bryan S. Graham, Shachar Kariv, Amit K. Khandelwal, Asim Ijaz Khwaja, Brigitte C. Madrian and Rohini Pande

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