Overreaction in Macroeconomic Expectations
We study the rationality of individual and consensus forecasts of macroeconomic and financial variables using the methodology of Coibion and Gorodnichenko (2015), who examine predictability of forecast errors from forecast revisions. We find that individual forecasters typically overreact to news, while consensus forecasts under-react relative to full-information rational expectations. We reconcile these findings within a diagnostic expectations version of a dispersed information learning model. Structural estimation indicates that departures from Bayesian updating in the form of diagnostic overreaction capture important variation in forecast biases across different series, yielding a belief distortion parameter similar to estimates obtained in other settings. (JEL C53, D83, D84, E13, E17, E27, E47)
Two-Way Fixed Effects Estimators with Heterogeneous Treatment Effects
Clément de Chaisemartin, Xavier D’Haultfœuille · American Economic Review
Bartik Instruments: What, When, Why, and How
Paul Goldsmith-Pinkham, Isaac Sorkin, Henry Swift · American Economic Review
Methods Matter: p-Hacking and Publication Bias in Causal Analysis in Economics
Abel Brodeur, Nikolai Cook, Anthony Heyes · American Economic Review
Valid <i>t</i>-ratio Inference for IV
David S. Lee, Justin McCrary, Marcelo J. Moreira, Jack Porter · American Economic Review
The micro and macro of managerial beliefs
Jose Maria Barrero · Journal of Financial Economics
Are disagreements agreeable? Evidence from information aggregation
Dashan Huang, Jiangyuan Li, Liyao Wang · Journal of Financial Economics
Social Media, News Consumption, and Polarization: Evidence from a Field Experiment
Roee Levy · American Economic Review
Social Media and Mental Health
Luca Braghieri, Roee Levy, Alexey Makarin · American Economic Review