Firm Performance and Macro Forecast Accuracy

Tanaka, Mari; Bloom, Nicholas; David, Joel M.; Koga, Maiko

doi:10.3386/w24776

2018

DOI: 10.3386/w24776

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Firm Performance and Macro Forecast Accuracy

Mari Tanaka

Nicholas Bloom

Joel M. David

et al.

Abstract: for their valuable comments and suggestions. We also thank Haruko Kato for her invaluable research assistant. Mari Tanaka is ordered first as the lead author, with the other three authors then ordered alphabetically. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.At least one co-author has disclosed a financial relationship of potential relevance for this research. Further information is available online at http://www.nbe… Show more

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Cited by 6 publications

References 18 publications

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On the Macroeconomic Consequences of Over-Optimism

Beaudry

Willems

2022

American Economic Journal: Macroeconomics

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Analyzing International Monetary Fund (IMF) data, we find that overly optimistic growth expectations for a country induce economic contractions a few years later. To isolate the causal effect, we take an instrumental variable approach—exploiting randomness in the country allocation of IMF mission chiefs. We first document that IMF mission chiefs differ in their individual degrees of forecast optimism, yielding quasi-experimental variation in the degree of forecast optimism at the country level. The mechanism appears to run through excessive accumulation of debt (public and private). Our findings illustrate the potency of unjustified optimism and underline the importance of basing economic forecasts upon realistic medium-term prospects. (JEL C53, E23, E27, E32, F33, H63)

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On the Macroeconomic Consequences of Over-Optimism

Beaudry

Willems

2022

American Economic Journal: Macroeconomics

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Learning Capitalism the Hard Way --- Evidence from Germany's Reunification

Triebs

Tumlinson

2013

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in ABSTRACTCommunism in East Germany sought to dampen the effect of market forces on firm productivity for nearly 40 years. How did East German firms respond to the free market after being thrust into it in 1990? We use a formal learning model and German business survey data to analyze the lasting impact of this far-reaching treatment on the way firms in former East Germany predicted their own productivity relative to firms in former West Germany during the two decades since Reunification. We find in confirmation of our formal model's predictions, that Eastern firms forecast productivity less accurately, particularly in dynamic and uncertain markets, but that the gap gradually closed over 12 to 13 years. Second, by analyzing the direction of firm level errors in conjunction with contemporaneous market signals we find that, in the years immediately following Reunification, Eastern firms estimate the market's role as generally less potent than Western firm do, an observation consistent with overweighting experiences from the communist era; however, over roughly 14 years both converge to the same (incorrect) overestimate of the market's role on their productivity.

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Identifying Ambiguity Shocks in Business Cycle Models Using Survey Data

Bhandari

Borovička

2016

SSRN Journal

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for helpful comments, and Mathias Trabandt for sharing codes with us. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

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Firm Performance and Macro Forecast Accuracy

Cited by 6 publications

References 18 publications

On the Macroeconomic Consequences of Over-Optimism

On the Macroeconomic Consequences of Over-Optimism

Learning Capitalism the Hard Way --- Evidence from Germany's Reunification

Identifying Ambiguity Shocks in Business Cycle Models Using Survey Data

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