Information Rigidities in Economic Growth Forecasts: Evidence from a Large International Panel
Dovern J, Fritsche U, Tamirisa N, Loungani P (2013)
Publication Language: English
Publication Type: Other publication type
Publication year: 2013
Series: IMF Working Paper
Article Number: 13/56
URI: https://www.imf.org/external/pubs/ft/wp/2013/wp1356.pdf
Abstract
We examine the behavior of forecasts for real GDP growth using a large panel of individual forecasts from 30 advanced and emerging economies during 1989–2010. Our main findings are as follows. First, our evidence does not support the validity of the sticky information model (Mankiw and Reis, 2002) for describing the dynamics of professional growth forecasts. Instead, the empirical evidence is more in line with implications of noisy information models (Woodford, 2002; Sims, 2003). Second, we find that information rigidities are more pronounced in emerging economies than advanced economies. Third, there is evidence of nonlinearities in forecast smoothing. It is less pronounced in the tails of the distribution of individual forecast revisions than in the central part of the distribution.
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APA:
Dovern, J., Fritsche, U., Tamirisa, N., & Loungani, P. (2013). Information Rigidities in Economic Growth Forecasts: Evidence from a Large International Panel.
MLA:
Dovern, Jonas, et al. Information Rigidities in Economic Growth Forecasts: Evidence from a Large International Panel. 2013.
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