Information Rigidities in Economic Growth Forecasts: Evidence from a Large International Panel
Jonas Dovern (),
Ulrich Fritsche (),
Prakash Loungani () and
Natalia Tamirisa ()
Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order from Verein für Socialpolitik / German Economic Association
We examine the behavior of forecasts for real GDP growth using a large panel of individual forecasts from 30 advanced and emerging economies during 1989-2010. Our main findings are as follows. First, our evidence does not support the validity of the sticky information model (Mankiw and Reis, 2002) for describing the dynamics of professional growth forecasts. Instead, the empirical evidence is more in line with implications of "noisy" information models (Woodford, 2002; Sims, 2003). Second, we find that information rigidities are more pronounced in emerging economies than advanced economies. Third, there is evidence of nonlinearities in forecast smoothing. It is less pronounced in the tails of the distribution of individual forecast revisions than in the central part of the distribution.
Keywords: forecast; economic; information; expectations (search for similar items in EconPapers)
JEL-codes: E27 E37 (search for similar items in EconPapers)
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Working Paper: Information Rigidities in Economic Growth Forecasts; Evidence from a Large International Panel (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc13:79936
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