IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Consensus and Uncertainty in Economic Prediction

Listed author(s):
  • Victor Zarnowitz
  • Louis A. Lambros
Registered author(s):

    The usual practice in economic forecasting is to report point predictions without specifying the attached probabilities. Periodic surveys of such forecasts produce group averages, which are taken to indicate the "consensus" of experts. Measures of the dispersion of individual forecasts around these averages are interpreted as indicating "uncertainty." However, consensus is best defined as the degree of agreement among the corresponding point predictions reported by different forecasters, while uncertainty is properly understood as referring to the diffuseness of the distributions of probabilities that individual forecasters attach to the different possible values of an economic variable. The NBER-ASA quarterly economic outlook surveys provide unique informationon probabilistic forecast distributions reported by a large number of individuals for changes in GNP and the implicit price deflator in 1969-81. These data permit comparisons of related point and probability forecasts from the same sources.The matched mean point forecasts and mean probability forecasts are found to agree closely. Standard deviations of point forecasts are generally smaller than the mean standard deviations of the predictive probability distributions for the same targets. Thus the former tend to understate uncertainty as measured by the latter. This is so particularly for short horizons.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: no

    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 1171.

    in new window

    Date of creation: Jul 1983
    Publication status: published as Zarnowitz, Victor and Louis A. Lambros. "Consensus and Uncertainty in Economic Prediction," Journal of Political Economy, Vol. 95, No. 3, pp. 591-621, June 1987.
    Handle: RePEc:nbr:nberwo:1171
    Note: EFG
    Contact details of provider: Postal:
    National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.

    Phone: 617-868-3900
    Web page:

    More information through EDIRC

    References listed on IDEAS
    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.:

    in new window

    1. Zarnowitz, Victor, 1982. "On Functions, Quality, and Timeliness of Economic Information," The Journal of Business, University of Chicago Press, vol. 55(1), pages 87-119, January.
    2. Makin, John H, 1982. "Anticipated Money, Inflation Uncertainty and Real Economic Activity," The Review of Economics and Statistics, MIT Press, vol. 64(1), pages 126-134, February.
    3. Victor Zarnowitz, 1983. "Rational Expectations and Macroeconomic Forecasts," NBER Working Papers 1070, National Bureau of Economic Research, Inc.
    4. Mullineaux, Donald J, 1980. "Unemployment, Industrial Production, and Inflation Uncertainty in the United States," The Review of Economics and Statistics, MIT Press, vol. 62(2), pages 163-169, May.
    5. Rosanne Cole, 1969. "Errors in Provisional Estimates of Gross National Product," NBER Books, National Bureau of Economic Research, Inc, number cole69-1, December.
    6. Peter A. Morris, 1977. "Combining Expert Judgments: A Bayesian Approach," Management Science, INFORMS, vol. 23(7), pages 679-693, March.
    7. Levi, Maurice D & Makin, John H, 1980. "Inflation Uncertainty and the Phillips Curve: Some Empirical Evidence," American Economic Review, American Economic Association, vol. 70(5), pages 1022-1027, December.
    8. Stekler, H O, 1969. "Evaluation of Econometric Inventory Forecasts," The Review of Economics and Statistics, MIT Press, vol. 51(1), pages 77-83, February.
    9. Victor Zarnowitz, 1982. "The Accuracy of Individual and Group Forecasts from Business Outlook Surveys," NBER Working Papers 1053, National Bureau of Economic Research, Inc.
    10. Victor Zarnowitz, 1980. "On Functions, Quality, and Timeliness of Economic Information," NBER Working Papers 0608, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:1171. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()

    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.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.

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

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.