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Strategic bias, herding behaviour and economic forecasts

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Author Info
Jordi Pons-Novell (University of Barcelona, Spain)
Abstract

Professional forecasters can have other objectives as well as minimizing expected squared forecast errors. This paper studies whether the people or companies which make forecasts behave strategically with the aim of maximizing aspects such as publicity, salary or their prestige, or more generally to minimize some loss function; or whether, on the contrary, they make forecasts which resemble consensus forecasts (herding behaviour). This study also analyses whether, as forecasters gain more reputation and experience, they make more radical forecasts, that is, they deviate further from the consensus. For this the Livingston Survey is used, a panel of experts who make forecasts on the future evolution of the United States economy. Copyright © 2003 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/for.860
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Publisher Info
Article provided by John Wiley & Sons, Ltd. in its journal Journal of Forecasting.

Volume (Year): 22 (2003)
Issue (Month): 1 ()
Pages: 67-77
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Handle: RePEc:jof:jforec:v:22:y:2003:i:1:p:67-77

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Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/2966

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

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    Other versions:
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Karlyn Mitchell & Douglas K. Pearce, 2004. "Professional Forecasts of Interest Rates and Exchange Rates: Evidence from the Wall Street Journal's Panel of Economists," Working Paper Series 004, North Carolina State University, Department of Economics. [Downloadable!]
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