"The Dynamics of Expectations: A Sequential Perspective on Macroeconomic Forecasting."
The chapter claims forecasting is a process during which forecasts are regularly updates and revised. Paying attention to the dynamics of expectations provides the opportunity to study changes in expectations formed by professionals, and thus give insights into how their labor unfolds. Drawing upon data from a purposely-built database of forecasts running from September 2006 to September 2017, linear and logistic regression models investigate the informational and organizational grounds of forecasts revisions. It suggests that similar forecasts form a consistent sequence, so that revisions mostly consist in the adjustments of ‘old’ forecasts with respect to newly available information. By and large, forecasting means updating former forecasts. Besides, data shows the core activity of forecasting organizations, and in turn their audience, matter to understand the extent to which they revise their forecasts: despite what forecasters claim in interviews, public institutions, among which the IMF or the OECD, tend to revise their forecasts on a wider scale than private banks or insurance companies. Eventually, scrutinizing how forecasts revisions distribute according to the years during which they are produced, stress that during major economic crises, such as the Great Recession, forecasters not only revise their former expectations downward but also upward. This hints at a Durkheim-inspired interpretation of economic crises as re-opening the future.