eprintid: 31616
rev_number: 22
eprint_status: archive
userid: 3114
dir: disk0/00/03/16/16
datestamp: 2022-05-11 15:50:05
lastmod: 2022-05-12 12:07:36
status_changed: 2022-05-11 15:50:05
type: workingPaper
metadata_visibility: show
creators_name: Lustenhouwer, Joep
creators_name: Salle, Isabelle
title: Forecast revisions in the presence of news: a lab investigation
subjects: ddc-330
divisions: i-181000
abstract: We conduct a laboratory experiment in a fully-fledged  macroeconomic model where participants receive information about future government spending shocks and are tasked with repeatedly forecasting output over a given horizon. By eliciting several-period-head predictions, we investigate forecast reaction to news and revision. The lab forecasts are consistent with stylized facts on reaction to news established in the survey literature. We find that subjects steadily learn the magnitude of the effect of the shocks on output, albeit not to full extent. We further find little support for fully backward-looking expectations. We rationalize the experimental data in the context of a Bayesian updating model, which provides a better description of the behaviors in longer-horizon environments and among more attentive and experienced subjects.
date: 2022-04
id_scheme: DOI
id_number: 10.11588/heidok.00031616
schriftenreihe_cluster_id: sr-3
schriftenreihe_order: 0714
ppn_swb: 180168135X
own_urn: urn:nbn:de:bsz:16-heidok-316163
language: eng
bibsort: LUSTENHOUWFORECASTRE202204
full_text_status: public
series: Discussion Paper Series / University of Heidelberg, Department of Economics
volume: 0714
place_of_pub: Heidelberg
pages: 78
citation:   Lustenhouwer, Joep ; Salle, Isabelle  (2022) Forecast revisions in the presence of news: a lab investigation.  [Working paper]     
document_url: https://archiv.ub.uni-heidelberg.de/volltextserver/31616/13/Lustenhouwer_Salle_2022_dp_714.pdf