IDEAS home Printed from https://ideas.repec.org/a/bla/sajeco/v93y2025i2p203-218.html

Firm‐Level Expectations and Macroeconomic Conditions: Underpinnings and Disagreement

Author

Listed:
  • Monique Reid
  • Pierre Siklos

Abstract

There is abundant evidence that financial analysts' inflation expectations differ in economically important ways from those of nonfinancial specialists. As a result, there is an increasing demand for firm‐level data to more accurately capture the views of price setters. The unusually rich firm‐level survey data from South Africa allow us to explore some of the ways in which the expectations of firms differ from those of other groups surveyed. We focus specifically on forecast disagreement, which can offer insights into the level of uncertainty reflected in the data and the degree to which expectations are influenced by the policy regime in place. We find that the divergence in inflation forecasts among respondents is partly explained by differences in how respondents believe the broader macroeconomy is evolving. The effect of aggregating the data in different ways is also considered. When we construct a new measure of macroeconomic disagreement that combines all the variables being forecast, we are able to see that forecasters responded sharply in early 2020 as the COVID‐19 pandemic emerged.

Suggested Citation

  • Monique Reid & Pierre Siklos, 2025. "Firm‐Level Expectations and Macroeconomic Conditions: Underpinnings and Disagreement," South African Journal of Economics, Economic Society of South Africa, vol. 93(2), pages 203-218, June.
    • Handle: RePEc:bla:sajeco:v:93:y:2025:i:2:p:203-218
    DOI: 10.1111/saje.12393
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/saje.12393
    Download Restriction: no
    File URL: https://libkey.io/10.1111/saje.12393?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. is not listed on IDEAS
    2. Monique Reid & Pierre Siklos, 2025. "Whose inflation expectations forecast best Alternatives based on survey and financial data," Working Papers 11077, South African Reserve Bank.

    More about this item

    JEL classification:

    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E47 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Forecasting and Simulation: Models and Applications
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:sajeco:v:93:y:2025:i:2:p:203-218. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/essaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.