Analyst Forecasts and the Rationality of Information Flows: Evidence from the Bloomberg G-7 Country Surveys
63 Pages Posted: 28 May 2001
Date Written: January 2001
Market participants expend considerable resources on analyst services to improve their decision-making processes. One of the more widely used sources of market information is that of Bloomberg, which derives market expectations from reputed experts on macroeconomic forecasts across several countries. Previous work that has studied the performance of macroeconomic survey forecasts has focused primarily on the United States. This study is the first that we are aware of that investigates survey forecasts outside the U.S.A. This study aims to test the rationality of Bloomberg's surveyed experts' median opinions for major macroeconomic announcements in the U.S.A., Japan, Canada, United Kingdom, Germany, France and Italy. While most non-U.S. forecasts appear consistent with rationality, the evidence for the U.S. is somewhat mixed for the entire sample period. However over the latter part of the sample, forecast accuracy for the U.S. analysts appears to have improved significantly and compares favorably with forecasts produced by the Bloomberg analysts for the other G7 countries.
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