Why do forecasters disagree? Lessons from the term structure of cross-sectional dispersion

A-Tier
Journal: Journal of Monetary Economics
Year: 2010
Volume: 57
Issue: 7
Pages: 803-820

Score contribution per author:

2.011 = (α=2.01 / 2 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Key sources of disagreement among economic forecasters are identified by using data on cross-sectional dispersion in forecasters' long- and short-run predictions of macroeconomic variables. Dispersion among forecasters is highest at long horizons where private information is of limited value and lower at short forecast horizons. Moreover, differences in views persist through time. Such differences in opinion cannot be explained by differences in information sets; our results indicate they stem from heterogeneity in priors or models. Differences in opinion move countercyclically, with heterogeneity being strongest during recessions where forecasters appear to place greater weight on their prior beliefs.

Technical Details

RePEc Handle
repec:eee:moneco:v:57:y:2010:i:7:p:803-820
Journal Field
Macro
Author Count
2
Added to Database
2026-01-28