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Information Rigidities: Comparing Average And Individual Forecasts For A Large International Panel

  • Jonas Dovern


    (University of Heidelberg)

  • Ulrich Fritsche


    (Hamburg University)

  • Prakash Loungani


    (International Monetary Fund)

  • Natalia Tamirisa


    (International Monetary Fund)

We study forecasts for real GDP growth using a large panel of individual forecasts from 36 advanced and emerging economies during 1989–2010. We show that the degree of information rigidity in average forecasts is substantially higher than that in individual forecasts. Individual level forecasts are updated quite frequently, a behavior more in line “noisy” information models (Woodford, 2002; Sims, 2003) than with the assumptions of the sticky information model (Mankiw and Reis, 2002). While there are cross-country variations in information rigidity, there is no systematic difference between advanced and emerging economies.

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Paper provided by The George Washington University, Department of Economics, Research Program on Forecasting in its series Working Papers with number 2014-001.

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Length: 34 pages
Date of creation: Jan 2014
Date of revision:
Handle: RePEc:gwc:wpaper:2014-001
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  17. Dovern, Jonas & Weisser, Johannes, 2011. "Accuracy, unbiasedness and efficiency of professional macroeconomic forecasts: An empirical comparison for the G7," International Journal of Forecasting, Elsevier, vol. 27(2), pages 452-465, April.
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