EconPapers    
Economics at your fingertips  
 

Do Local Forecasters Have Better Information?

Kenza Benhima and Elio Bolliger

MPRA Paper from University Library of Munich, Germany

Abstract: Using individual inflation and GDP growth forecasts by professional forecasters for a panel of emerging and advanced economies, we provide direct evidence that foreign forecasters update their forecasts less frequently than local forecasters (about 10% less frequently) and make larger errors in absolute value (up to 9% larger). The foreign forecasters' less accurate forecasts are not due to a more irrational expectation, but to less precise information. The asymmetry is stronger at shorter horizons and when forecasting inflation. In general, the asymmetry is not stronger when forecasting is more uncertain. Taken together, our results provide a basis for disciplining international finance and trade models with heterogeneous information. On the methodological side, we provide tests that identify differences in information frictions across groups.

Keywords: Information asymmetries; Expectation formation (search for similar items in EconPapers)
JEL-codes: D82 D83 E37 F40 (search for similar items in EconPapers)
Date: 2022-11, Revised 2023-09
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/117072/9/MPRA_paper_117072.pdf original version (application/pdf)

Related works:
Working Paper: Do Local Forecasters Have Better Information? (2023) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:117072

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().

 
Page updated 2025-03-19
Handle: RePEc:pra:mprapa:117072