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Macroeconomics Forecasts and Microeconomic Forecasters

  • Owen Lamont

In the presence of principal-agent problems, published macroeconomic forecasts by professional economists may not measure expectations. Forecasters may use their forecasts in order to manipulate beliefs about their ability. I test a cross-sectional implication of models of reputation and information-revelation. I find that as forecasters become older and more established, they produce more radical forecasts. Since these more radical forecasts are in general less accurate, ex post forecast accuracy grows significantly worse as forecasters become older and more established. These findings indicate that reputational factors are at work in professional macroeconomic forecasts.

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File URL: http://www.nber.org/papers/w5284.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 5284.

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Date of creation: Oct 1995
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Publication status: published as Lamont, Owen A. "Macroeconomic Forecasts And Microeconomic Forecasters," Journal of Economic Behavior and Organization, 2002, v48(3,Jul), 265-280.
Handle: RePEc:nbr:nberwo:5284
Note: ME
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