Professionals Forecasting Inflation: The Role of Inattentiveness and Uncertainty

Joshy Easaw (), Roberto Golinelli and Saeed Heravi ()
Additional contact information
Joshy Easaw: Cardiff Business School, http://business.cardiff.ac.uk/people/staff/joshy-easaw
Saeed Heravi: Cardiff Business School, http://business.cardiff.ac.uk/people/staff/saeed-heravi

No E2022/7, Cardiff Economics Working Papers from Cardiff University, Cardiff Business School, Economics Section

Abstract: The purpose of this paper is to investigate the nature of professionals inflation forecasts inattentiveness. We introduce and empirically investigate a new generalized model of inattentiveness due to informational rigidity. In doing so, we outline a novel model that considers the non-linear relationship between inattentiveness and aggregate uncertainty, which crucially distinguishes between macro-economic and data (measurement error) uncertainty. The empirical analysis uses the Survey of Professional Forecasters data and indicates that inattentiveness due to imperfect information explains professional forecasts dynamics.

Keywords: Forecasting Popular Votes Shares; Electoral Poll; Forecast combination, Hybrid model; Support Vector Machine (search for similar items in EconPapers)
Pages: 41 pages
Date: 2022-03
New Economics Papers: this item is included in nep-ban, nep-cwa, nep-for and nep-mac
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