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Herding Behavior of Business Cycle Forecasters in Times of Economic Crises

Jan-Christoph Rülke, Maria Silgoner and Julia Wörz ()
Authors registered in the RePEc Author Service: Julia Maria Woerz ()

No 12-03, WHU Working Paper Series - Economics Group from WHU - Otto Beisheim School of Management

Abstract: Using a large international data set we analyze whether business cycle forecasters tend to herd or anti-herd. Applying different measures of economic crises, we distinguish between normal economic circumstances and times of crises. We find evidence for anti-herding behavior for most industrial economies, i.e. forecasters deliberately stick out their neck with extreme forecasts for strategic reasons. For a set of emerging market economies, by contrast, we find evidence for herding behavior. We relate this finding to the high incidence of economic and financial crises in these countries. A test for herding behavior during economic crises confirms that forecasters tend to herd in times of high forecast uncertainty.

Keywords: Business Cycle; Forecasting; Economic Crises; (Anti-)Herding (search for similar items in EconPapers)
JEL-codes: E32 E37 E66 (search for similar items in EconPapers)
Date: 2012-09
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Published International Journal of Forecasting, Volume 32, Issue 1, January–March 2016, Pages 23–33

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