Title | Survey Measurement of Probabilistic Macroeconomic Expectations: Progress and Promise |
Publication Type | Report |
Year of Publication | 2017 |
Authors | Manski, CF |
Series Title | NBER Working Paper Series |
Document Number | Working Paper No. 23418 |
Date Published | 05/2017 |
Institution | National Bureau of Economic Research |
City | Cambridge, MA |
Keywords | Survey Methodology |
Abstract | Economists commonly suppose that persons have probabilistic expectations for uncertain events, yet empirical research measuring expectations was long rare. The inhibition against collection of expectations data has gradually lessened, generating a substantial body of recent evidence on the expectations of broad populations. This paper first summarizes the history leading to development of the modern literature and overviews its main concerns. I then describe research on three subjects that should be of direct concern to macroeconomists: expectations of equity returns, inflation expectations, and professional macroeconomic forecasters. I also describe work that questions the assumption that persons have well-defined probabilistic expectations and communicate them accurately in surveys. Finally, I consider the evolution of thinking about expectations formation in macroeconomic policy analysis. I favorably observe the increasing willingness of theorists to study alternatives to rational expectations assumptions, but I express concern that models of expectations formation will proliferate in the absence of empirical research to discipline thinking. To make progress, I urge measurement and analysis of the revisions to expectations that agents make following occurrence of unanticipated shocks. |
URL | http://www.nber.org/papers/w23418.pdf |
DOI | 10.3386/w23418 |
Citation Key | 9089 |