Economist Herding and Accuracy in Macroeconomic News Forecasts
|Speaker:||Hossein Jahanshahloo, Cardiff Business School|
|Date: ||Tuesday 25 February 2020|
|Time: ||13:45 - 15:15|
|Location: ||Constantine Leventis Teaching Room, Building One|
A comprehensive literature exists on the relationship between forecasters’ experience and their herding behaviour. While the existing studies attempt to shed light on the influence of forecasters’ experience on their strategic behaviour (i.e., herding) and accuracy, they have often ignored the macroeconomic news environment and have examined a limited range of macroeconomic news. In this paper, we examine the impact of the complex interaction of macroeconomic news forecasters’ experience and macroeconomic news environment on forecasters’ herding behaviour and forecasting accuracy. We address these issues by examining all the available macroeconomic news announcements and the individual economists’ forecast for them from 1998 to the end of 2016. We find that first, the relationship between forecasters’ herding and accuracy and their experience is not linear. Second, this relationship varies at different stages of an economist’s news-career stage and based on the importance of the macroeconomic news. Our findings shed light on the mechanism of economist behaviour and their work experience.