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Do US Macroeconomic Forecasters Exaggerate Their Differences?

Application of the Bernhardt, Campello and Kutsoati (2006) test of herding to the calendar-year annual output growth and inflation forecasts suggests forecasters tend to exaggerate their differences, except at the shortest horizon when they tend to herd. We consider whether these types of behaviour can help to explain the puzzle that professional forecasters sometimes make point predictions and histogram forecasts which are mutually inconsistent.

Published on 29th September 2014
Authors Michael P. Clements, ICMA Centre, Henley Business School
Series Reference 2014-10
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