Roos, M. W. M. and Schmidt, Ulrich (2012) The Importance of Time-Series Extrapolation for Macroeconomic Expectations. German Economic Review, 13 (2). pp. 196-210. DOI 10.1111/j.1468-0475.2011.00551.x.

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Abstract

This article presents a simple experiment on how laypeople form macroeconomic expectations. Subjects have to forecast inflation and gross domestic product growth. By varying the information provided in different treatments, we can assess the importance of historical time-series information vs. information acquired outside the experimental setting such as knowledge of expert forecasts. It turns out that the availability of historical data has a dominant impact on expectations and wipes out the influence of outside-lab information completely. Consequently, backward-looking behavior can be identified unambiguously as a decisive factor in expectation formation.

Document Type:	Article
Additional Information:	Ruhr Univ Bochum, Fak Wirtschaftswissensch, Lehrstuhl Makrookon, D-44801 Bochum, Germany. Univ E Anglia, Norwich NR4 7TJ, Norfolk, England. Univ Kiel, D-24098 Kiel, Germany. Kiel Inst World Econ, Kiel, Germany. Roos, MWM (reprint author), Ruhr Univ Bochum, Fak Wirtschaftswissensch, Lehrstuhl Makrookon, Univ Str 150, D-44801 Bochum, Germany. Michael.Roos@rub.de
Keywords:	Expectations macroeconomic experiment use of information inflation forecasts asset pricing experiments rational-expectations interest-rates inflation forecasts hypothesis sentiment output
Research affiliation:	OceanRep > The Future Ocean - Cluster of Excellence Kiel University
Refereed:	Yes
Open Access Journal?:	No
Publisher:	John Wiley & Sons: Blackwell Publishing
Projects:	Future Ocean
Date Deposited:	14 May 2014 09:38
Last Modified:	31 Jul 2019 04:59
URI:	https://oceanrep.geomar.de/id/eprint/24231

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