Japanese GDP Forecasters Are Pressimistic in Boom, Optimistic in Recession, and Always Too Jumpy.

This paper analyzes the rationality of Japanese macroeconomic forecasters. It finds that Japanese individual forecasters are pessimistic in boom and optimistic in recession, and that they over-react to new information. Across forecasters, the magnitude of average forecast revisions is not correlated with the magnitude of average forecast errors. These results together are consistent with neither the rational expectations hypothesis nor reputation models with rational and strategic forecasters.