Information Rigidities; Comparing Average and Individual Forecasts for a Large International Panel
Jonas Dovern (),
Ulrich Fritsche (),
Prakash Loungani () and
Natalia Tamirisa ()
No 14/31, IMF Working Papers from International Monetary Fund
We study forecasts for real GDP growth using a large panel of individual forecasts from 36 advanced and emerging economies during 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 more in line “noisy” information models (Woodford, 2002; Sims, 2003) than with the assumptions of the sticky information model (Mankiw and Reis, 2002). While there are cross-country variations in information rigidity, there is no systematic difference between advanced and emerging economies.
Keywords: Emerging markets; Economic growth; Economic forecasting; Developed countries; Forecasting models; Rational inattention, aggregation bias, growth forecasts, information rigidity, forecast behaviour, emerging economies, econometrics, parameters, Forecasting and Simulation, (search for similar items in EconPapers)
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Journal Article: Information rigidities: Comparing average and individual forecasts for a large international panel (2015)
Working Paper: INFORMATION RIGIDITIES: COMPARING AVERAGE AND INDIVIDUAL FORECASTS FOR A LARGE INTERNATIONAL PANEL (2014)
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