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TV Weather Forecast or Look through the Window? Expert and Consumer Expectations about Macroeconomic Conditions

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  • Michael W. M. Roos

Abstract

This paper investigates the empirical relation between consumer and expert expectations about macroeconomic conditions in Germany. Using data from the EU Consumer Confidence Survey and the ZEW business expectations, static models and error‐correction models are estimated explaining consumer expectations as functions of expert expectations, consumer retrospections, and lagged consumer expectations. It's found that consumer expectations are only weakly related to expert expectations, but strongly influenced by consumers' retrospections. Consumers primarily extrapolate perceptions about current economic conditions in the future. However, during national election campaigns, the relation between consumer and expert expectations is stronger.

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  • Michael W. M. Roos, 2005. "TV Weather Forecast or Look through the Window? Expert and Consumer Expectations about Macroeconomic Conditions," Kyklos, Wiley Blackwell, vol. 58(3), pages 415-437, July.
    • Handle: RePEc:bla:kyklos:v:58:y:2005:i:3:p:415-437
    DOI: 10.1111/j.0023-5962.2005.00295.x
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    1. Hüfner, Felix P. & Schröder, Michael, 2001. "Unternehmens- versus Analystenbefragungen: Zum Prognosegehalt von ifo-Geschäftserwartungen und ZEW-Konjunkturerwartungen," ZEW Discussion Papers 01-04, ZEW - Leibniz Centre for European Economic Research.
    2. Benner, Joachim & Meier, Carsten-Patrick, 2003. "Prognosegüte alternativer Frühindikatoren für die Konjunktur in Deutschland," Kiel Working Papers 1139, Kiel Institute for the World Economy (IfW Kiel).
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    Cited by:

    1. Michael W. M. Roos & Ulrich Schmidt, 2012. "The Importance of Time‐Series Extrapolation for Macroeconomic Expectations," German Economic Review, Verein für Socialpolitik, vol. 13(2), pages 196-210, May.
    2. Brückbauer, Frank & Schröder, Michael, 2021. "Data resource profile: The ZEW FMS dataset," ZEW Discussion Papers 21-100, ZEW - Leibniz Centre for European Economic Research.
    3. Roos, Michael W.M., 2008. "Predicting the macroeconomic effects of abstract and concrete events," European Journal of Political Economy, Elsevier, vol. 24(1), pages 192-201, March.
    4. Gerunov, Anton, 2013. "Връзка Между Икономическите Очаквания И Стопанската Динамика В Ес-27 [Linkages Between Expectations and Economic Dynamics in EU-27]," MPRA Paper 68795, University Library of Munich, Germany.

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