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Do macroeconomic forecasters use macroeconomics to forecast?

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  • Casey, Eddie

Abstract

Faced with an uncertain future, forecasters often rely on textbook relationships to build a coherent narrative for their macroeconomic forecasts. We focus on two cornerstones of modern macroeconomics – Okun’s law and the Phillips curve – and examine whether or not professionals forecast in a way that is consistent with these. Using microdata from the US, Euro Area, and UK surveys of professional forecasters, we examine forecasts over the period 1981-2017 at the level of the individual and across different time horizons. Our findings show that the majority of forecasters produce their forecasts in a manner that is consistent with macroeconomic theory.

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  • Casey, Eddie, 2020. "Do macroeconomic forecasters use macroeconomics to forecast?," International Journal of Forecasting, Elsevier, vol. 36(4), pages 1439-1453.
    • Handle: RePEc:eee:intfor:v:36:y:2020:i:4:p:1439-1453
    DOI: 10.1016/j.ijforecast.2020.02.006
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    References listed on IDEAS

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