Isaac Baley (link) from Universitat Pompeu Fabra will present his paper entitled "Lumpy Forecasts" on Wednesday, 6th of December at 11.45. The seminar will be physical at FASS 2054 but it can also be attended at the following link
https://sabanciuniv.zoom.us/j/91383976765
Lumpy Forecasts (joint with Javier Turen)
We document that professional forecasters adjust their inflation forecasts in a lumpy way—forecasts are changed infrequently, and when adjusted, they are significantly revised. As the forecasting horizon shrinks, forecast revisions' frequency and size decrease. Using a fixed-event forecasting framework, we assess the role of the consensus forecast and individual beliefs in shaping forecast revisions, both at the extensive and the intensive margins. A model of Bayesian belief formation with strategic concerns and fixed forecast revision costs generates lumpy forecasts consistent with the data. Lumpiness rationalizes overreaction to private information, without the need for behavioral biases such as extrapolation.
