City Research Online

Are macroeconomic forecasters optimists or pessimists? A reassessment of survey based forecasts

Huang, R., Pilbeam, K. ORCID: 0000-0002-5609-8620 & Pouliot, W. (2022). Are macroeconomic forecasters optimists or pessimists? A reassessment of survey based forecasts. Journal of Economic Behavior and Organization, 197, pp. 706-724. doi: 10.1016/j.jebo.2022.03.012


We examine the issue of macroeconomic uncertainty in the Eurozone Area using forecasts from the European Central Bank’s Survey of Professional Forecasters from the inception of the Euro in 1999Q1 to 2020Q2. We provide new insights concerning the optimism or pessimism of the distribution of forecasts by examining the 25th and 75th quartiles of the forecast distribution for each three key macro economic variables, GDP growth, inflation and unemployment. In addition, we examine the over- or under-confidence of forecasters in the survey by deriving the term structure of ex-ante uncertainty for up to 2 years ahead and compare it to ex-post uncertainty, enabling us to make some comparisons with existing US studies. Our results suggest that GDP growth forecasts tend towards optimism, while those for inflation and unemployment tend towards pessimism. In addition, ex-ante uncertainty in forecasts for the Eurozone Area is less than ex-post uncertainty at both the short and longer-term forecasting horizons, for all three variables. This suggests a tendency towards over-confidence on the part of Eurozone forecasters.

Publication Type: Article
Additional Information: © 2022. This article has been accepted for publication by Elsevier in Journal of Economic Behavior and Organization. This manuscript version is made available under the CC-BY-NC-ND 4.0 license
Publisher Keywords: Macroeconomic uncertainty; ECB Survey of Professional Forecasters; subjective probability distribution; ex-ante uncertainty; ex-post uncertainty; Bayesian decision theory.
Subjects: H Social Sciences > HB Economic Theory
Departments: School of Policy & Global Affairs > Economics
[img] Text - Accepted Version
This document is not freely accessible until 8 October 2023 due to copyright restrictions.
Available under License Creative Commons Attribution Non-commercial No Derivatives.

To request a copy, please use the button below.

Request a copy



Downloads per month over past year

View more statistics

Actions (login required)

Admin Login Admin Login