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What do Economists Know? An Empirical Study of Experts' Expectations

Bryan W. Brown
Shlomo Maital

Abstract

For more than three decades, economic columnist Joseph A. Livingston has canvassed a panel of economists twice a year, eliciting their six-month and twelve-month forecasts for more than a dozen key variables. This study analyzes whether the experts' predictions are unbiased, and whether complete use was made of all relevant, known information (unbiasedness and completeness being necessary conditions for fully rational expectations). Little bias was found in either the half-year or full-year predictions, but extensive underutilization of information--particularly data on monetary growth--occurred.