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Survey-based expectations are mostly used by monetary authorities for inflation forecasts and evaluation of the credibility of their inflation fighting policies. It is also an important link in the monetary policy transmission mechanism. This study examined the predictive ability of business...
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-cycle states. We show that forecasts for recessions are subject to a large negative systematic forecast error (forecasters … overestimate growth), while forecasts for recoveries are subject to a positive systematic forecast error. Forecasts made for … expansions have, if anything, a small systematic forecast error for large forecast horizons. When we link information about the …
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