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Direct Evidence on Sticky Information from the Revision Behavior of Professional Forecasters

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  • Karlyn Mitchell
  • Douglas K. Pearce

Abstract

We provide evidence on the sticky‐information model of Mankiw and Reis () by examining how often individual professional forecasters revise their forecasts. We draw interest rate and unemployment rate forecasts from the monthly Wall Street Journal surveys. We find evidence that forecasters frequently leave forecasts unchanged but revise more often the larger the changes in the information set; additionally, the information sensitivity of revision frequencies increased after 2007. We also find that, on average, forecasters in our sample revise more frequently than found in previous research but that revised forecasts are not consistently more accurate.

Suggested Citation

  • Karlyn Mitchell & Douglas K. Pearce, 2017. "Direct Evidence on Sticky Information from the Revision Behavior of Professional Forecasters," Southern Economic Journal, John Wiley & Sons, vol. 84(2), pages 637-653, October.
    • Handle: RePEc:wly:soecon:v:84:y:2017:i:2:p:637-653
    DOI: 10.1002/soej.12236
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    More about this item

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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