## Information Rigidities: Comparing Average and Individual Forecasts for a Large International Panel

_IMF Working Papers, February 12, 2014_

## Source details

**Canonical URL:** [Information Rigidities: Comparing Average and Individual Forecasts for a Large International Panel](https://www.imf.org/en/publications/wp/issues/2016/12/31/information-rigidities-comparing-average-and-individual-forecasts-for-a-large-international-41350)

## Other formats

- [Markdown version](/en/publications/wp/issues/2016/12/31/information-rigidities-comparing-average-and-individual-forecasts-for-a-large-international-41350/index.md)
- [Structured JSON version](/en/publications/wp/issues/2016/12/31/information-rigidities-comparing-average-and-individual-forecasts-for-a-large-international-41350/index.json)
- [Bundle manifest](/en/publications/wp/issues/2016/12/31/information-rigidities-comparing-average-and-individual-forecasts-for-a-large-international-41350/bundle-manifest.json)

## Bibliographic details
- Authors: Jonas Dovern, Ulrich Fritsche, Prakash Loungani, Natalia T. Tamirisa
- Published: February 12, 2014
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781484305201.001

---

### Summary and main findings
- Study of forecasts for real GDP growth using a large panel of individual forecasts from 36 advanced and emerging economies during 1989–2010.
- The degree of information rigidity in average forecasts is substantially higher than that in individual forecasts.
- Individual-level forecasts are updated quite frequently, a behavior more in line with “noisy” information models (Woodford, 2002; Sims, 2003) than with the assumptions of the sticky information model (Mankiw and Reis, 2002).
- There are cross-country variations in information rigidity, but no systematic difference between advanced and emerging economies.

### Methods and technical focus
- Econometric analysis comparing average versus individual forecast behavior.
- Emphasis on estimation techniques and measures of rigidity, including references to:
  - rigidity coefficient
  - smoothing parameter
  - OLS estimator
  - standard deviation
- Use of real-time data vintage and forecast revision analysis.
- Keywords highlighting methodological and theoretical orientation: aggregation bias, density estimate, Estimation techniques, forecast behaviour, forecast data, forecast revision, growth forecasts, information rigidity, Public expenditure review, Rational expectations, Rational inattention, WP.

### Interpretations and theoretical implications
- Evidence supports models with frequent updating at the individual forecaster level (noisy information frameworks) rather than the sticky information model.
- Aggregation amplifies observed information rigidity: average forecasts display substantially higher rigidity than underlying individual forecasts.
- Cross-country heterogeneity exists, but advanced versus emerging economy classification does not systematically explain differences in rigidity.

### Relevance and subject classification
- Subjects: Econometric analysis, Economic theory, Estimation techniques, Expenditure, Public expenditure review, Rational expectations.
- Practical relevance for researchers and policymakers interested in forecast behavior, forecast revision dynamics, and the implications of aggregation for perceived information rigidity.

*IMF Working Papers — Information Rigidities: Comparing Average and Individual Forecasts for a Large International Panel (Working Paper No. 2014/031).*

---

## Content in this bundle

- **Microsoft Word - WP Rigities Forecasters.docx**
  - [Microsoft Word - WP Rigities Forecasters.docx (Markdown version)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2014/_wp1431.pdf.md){rel="alternate" type="text/markdown"}
  - [Microsoft Word - WP Rigities Forecasters.docx (PDF)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2014/_wp1431.pdf){rel="external" type="application/pdf"}

---

_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/information-rigidities-comparing-average-and-individual-forecasts-for-a-large-international-41350_