Information Rigidities: Comparing Average and Individual Forecasts for a Large International Panel

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Author/Editor: Jonas Dovern, Ulrich Fritsche, Prakash Loungani, Natalia T. Tamirisa
Release Date: © February, 2014
ISBN : 978-1-48430-520-1
Stock #: WPIEA2014031
Stock Status: On back-order

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We study forecasts for real GDP growth using a large panel of individual forecasts from 36 advanced and emerging economies during 1989–2010. We show that the degree of information rigidity in average forecasts is substantially higher than that in individual forecasts. Individual level forecasts are updated quite frequently, a behavior more in line “noisy” information models (Woodford, 2002; Sims, 2003) than with the assumptions of the sticky information model (Mankiw and Reis, 2002). While there are cross-country variations in information rigidity, there is no systematic difference between advanced and emerging economies.

More publications in this series: Working Papers

More publications by: Jonas Dovern ; Ulrich Fritsche ; Prakash Loungani ; Natalia T. Tamirisa