Working Papers

"Biased Forecasts to Affect Voting Decisions? The Brexit Case"

Abstract

This paper introduces macroeconomic forecasters as political agents and suggests that they use their forecasts to influence voting outcomes. We develop a probabilistic voting model in which voters do not have complete information about the future states of the economy and have to rely on macroeconomic forecasters. The model predicts that it is optimal for forecasters with economic interest (stakes) and influence to publish biased forecasts prior to a referendum. We test our theory using high-frequency data at the forecaster level surrounding the Brexit referendum. The results show that forecasters with stakes and influence released much more pessimistic and incorrect estimates for GDP growth subject to the leave outcome than other forecasters.

"Inefficient Use of Competitors’ Forecasts?"

Abstract

This paper assesses to what extent forecasters make efficient use of competitors’ forecasts. Using a panel of forecasters, I find that forecasters underuse information from their competitors in their forecasts for current and next year’s annual GDP growth and inflation. The results also show that forecasters increase the attention to their competitors as the forecast horizon decreases. In a model of noisy information with fixed target forecasts, I confirm the empirical results of underuse of competitors’ information. I also extend the model to include a revision cost and show how this can only explain the observed inefficiency and observed horizon dynamics if we assume horizon specific discounting. Using the same framework, I also rule out overconfidence as the main explanation of the observed behavior.

Work in Progress

1. Electoral Cycles in Macroeconomic Forecasts (with Davide Cipullo)
2. Withering Cash: Is Sweden ahead of the curve or just special? (with Hanna Armelius and Carl Andreas Claussen)
3. The Effect of Increasing the Transparency of Monetary Policy Committees (with Mikael Apel and Marianna Blix Grimaldi)

Journal Publications

Adjusting for Information Content when Comparing Forecast Performance (2017)

Other Publications

Kommentar på Johan Lönnroths artikel ”Brev till den parlamentariska riksbankskommittén” (2018)

Do Swedish Forecasters Properly Account for Sweden’s International Dependence? (2017)

It’s a myth that the Riksbank’s forecasts have been governed by models (2017)

En myt att Riksbankens prognoser styrts av modeller (2016)

An assessment of the Riksbank’s international forecasts (2015)

Interest and inflation rates through the lens of the theory of Irving Fisher (2015)