Herding Behavior of Business Cycle Forecasters in Times of Economic Crises
Using a large international data set we analyze whether business cycle forecasters tend to herd or anti-herd. Applying different measures of economic crises, we distinguish between normal economic circumstances and times of crises. We find evidence for anti-herding behavior for most industrial economies, i.e. forecasters deliberately stick out their neck with extreme forecasts for strategic reasons. For a set of emerging market economies, by contrast, we find evidence for herding behavior. We relate this finding to the high incidence of economic and financial crises in these countries. A test for herding behavior during economic crises confirms that forecasters tend to herd in times of high forecast uncertainty.
|Date of creation:||Sep 2012|
|Publication status:||Published International Journal of Forecasting, Volume 32, Issue 1, January–March 2016, Pages 23–33|
|Contact details of provider:|| Postal: Burgplatz 2, 56179 Vallendar|
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Web page: https://www.whu.edu/en/faculty-research/economics-group/
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