Heterogeneous expectations among professional forecasters

Christian Conrad and Kajal Lahiri

No 23-062, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: Macroeconomic expectations of various economic agents are characterized by substantial cross-sectional heterogeneity. In this paper, we focus on expectations heterogeneity among professional forecasters. We first present stylized facts and discuss theoretical explanations for heterogeneous expectations. We then provide an overview of the empirical evidence supporting the different theories and point to directions for future research. Our literature review is complemented by empirical evidence based on the ZEW Financial Market Survey, covering the behavior of expectations heterogeneity during the recent surge in inflation in 2021 and 2022. A central finding is that differences in perceptions about the workings of the economy and heterogeneity in perceptions of the precision of new signals drive disagreement among professional forecasters. While the level of disagreement varies over the business cycle, differences in beliefs persist over time.

Keywords: disagreement; expectations; forecasts; rationality; survey data (search for similar items in EconPapers)
JEL-codes: C53 D83 D84 E17 E37 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Heterogeneous Expectations among Professional Forecasters (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:283583

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