The Accuracy and Rationality of US and Australian Household Inflation Forecasts

Download or read book The Accuracy and Rationality of US and Australian Household Inflation Forecasts written by Lloyd B. Thomas and published by . This book was released on 2008 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Median household 1-year-ahead consumer price inflation forecasts generated by the Michigan survey of US households and the Melbourne Institute survey of Australian households are tested for accuracy, bias and efficiency, and compared with naïve forecasts, forecasts derived from financial market phenomena, and forecasts of professional economists. In the post-1993:1 period which encompasses the Melbourne Institute's 2006 revision of the Australian series, both countries household forecasts are unbiased, efficient and relatively accurate. In the earlier period (1978:11993:1), the Melbourne series exhibits substantial upward bias. Several potential explanations for the inferior early Melbourne performance are offered.