Market consensus: A case of biased estimates

• Alfredo Coutino ^[1]
  1. [1] Center for Economic Forecasting of Mexico (CKF)
• Localización: Estudios de economía aplicada, ISSN 1133-3197, ISSN-e 1697-5731, Vol. 38, Nº 3, 2020 (Ejemplar dedicado a: Africa: Economic transformations and development challenges (II))
• Idioma: inglés
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• Resumen

  • Policymakers and governments usually defend their growth estimates with the argument that they are in line with the market consensus. However, in many emerging market economies the consensus has a strong bias given that an important component of participants are followers rather than genuine independent forecasters. In the case of Mexico and Chile there are empirical reasons to believe that the consensus is strongly biased toward official estimates. This paper addresses the empirical bias in the consensus forecast, the Granger statistical test to confirm the direction of the causality, and the main policy implications.