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Behavior Biases in Macroeconomic Forecasting

Henry Nasses () and Rodrigo De Losso ()
Authors registered in the RePEc Author Service: Rodrigo De-Losso

No 2020_23, Working Papers, Department of Economics from University of São Paulo (FEA-USP)

Abstract: This paper documents the optimism in the projection of GDP and IPCA. That is, it shows that GDP projections are systematically higher than what actually happens, and IPCA projections are systematically lower. Then it tests whether there are institutional incentives for the behavior of professionals who make such projections. Finally, it verifies whether the revision of the projections still carries the previously identified bias. The results confirm the existence of an optimistic bias in the GDP and IPCA projections and this bias remains in the following revisions. However, there seems to be no institutional incentive for this behavior

Keywords: Biases; Behavioral Economics; Behavioral Finance; forecast; GDP; inflation; Boletim Focus (search for similar items in EconPapers)
JEL-codes: C12 C53 E37 E71 G41 (search for similar items in EconPapers)
Date: 2020-11-13
New Economics Papers: this item is included in nep-mac and nep-ore
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