The Unassuming Economist

From a paper by Haibo Li, Jiayin Sun, and Ningxin Qiu:

“Previous research shows that the impacts of inflation expectations on consumer behaviour are mixed. Using a survey of 2,500 Chinese households, this letter finds that rising inflation expectations increase the purchase intention of durable goods, such as housing and cars, while reducing the demand for easily substitutable goods, such as mobile phones. The effect exhibits significant heterogeneity across income and age groups: higher-income and younger consumers are more inclined to increase investment-oriented spending, while lower-income and older groups adopt more cautious consumption behaviours. These findings also highlight the heterogeneous effects of inflation expectations on consumer welfare across demographic characteristics.”

From a paper by Antoine Gaudin, Brendan Harnoys Vannier, and Martin Kessler:

“In this article, we construct a new database on 606 Debt Sustainability Assessments (DSAs) published for 68 Low Income Countries over 2013–2023, a period covering the last two methodology updates. We study associated forecast errors to account for IMF and WB biases given their central role in the perception of countries‘ performances. The recent methodological change does not display improvement in projection accuracy. DSAs display a tendency for optimism when projecting public and publicly guaranteed debt ratios (realized ratios are higher than projected). DSAs perform relatively better for Small Islands Developing States. Circumstantial determinants (IMF programmes or recession) deepen optimism biases.”

From a paper by Emrehan Aktuğ and Abolfazl Rezghi:

“Using a large cross-country dataset covering over 150 countries and more than 10 macroeconomic variables, this study examines the consistency of IMF World Economic Outlook (WEO) forecasts with the full information rational expectations (FIRE) hypothesis. Similar to Consensus Economics forecasts, WEO forecasts exhibit an overreaction to news. Our analysis reveals that this overreaction is asymmetric, with more measured response to bad news, bringing forecasts closer to the FIRE benchmark. Moreover, forecasts align more closely with FIRE hypothesis during economic downturns or when a country is part of an IMF program. Overreaction becomes more pronounced for macroeconomic variables with low persistence and for forecasts over longer horizons, consistent with recent theoretical models. We also develop a model to explain how state-dependent nature of attentiveness may drive this asymmetric overreaction.”

Venue: University of North Carolina at Charlotte | 3 & 4 March 2025

The Foresight Practitioner Conference (FPC) brings together preeminent forecasting practitioners and business leaders to network, learn, and explore emerging and cutting-edge aspects of forecasting. The conference focuses on collaborating and improving forecast practice by showcasing businesses, subject matter experts, and organizations that significantly impact value. The conference is hosted by the International Institute of Forecasters (IIF) and includes the first-annual IIF Practice Competition.

Mark your calendar for ISF 2025! Beijing, China | June 29 – July 2 IIF is now accepting abstract submissions for ISF 2025 ~ Visit their website for more information., For more information on Keynote Speakers, venue, lodging and social activities, go to the ISF website. If you have any questions, contact them at isf@forecasters.org.