An assessment of the EU growth forecasts under asymmetric preferences

Christodoulakis, George A and Mamatzakis, Emmanuel C (2008) An assessment of the EU growth forecasts under asymmetric preferences. Journal of Forecasting, 27 (6). pp. 483-492. ISSN 0277-6693

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Abstract

EU Commission forecasts are used as a benchmark within the framework of the Stability and Growth Pact, aimed at providing a prudential view of economic outlook, especially for member states in an Excessive Deficit Procedure. Following Elliott et al. (2005), we assess whether there exist asymmetries in the loss preference of the Commission's GDP growth forecasts from 1969 to 2004. Our empirical evidence is robust across information sets and reveals that the loss preferences tend to show some variation in terms of asymmetry across member states. Given certain conditions concerning the time horizon of forecasts and the functional form of the loss preferences, the evidence further reveals that the Commission forecasting exercise could be subject to caveats.

Item Type: Article
Schools and Departments: School of Business, Management and Economics > Business and Management
Subjects: H Social Sciences
Depositing User: Janet Snow
Date Deposited: 03 Jul 2012 14:46
Last Modified: 03 Jul 2012 14:47
URI: http://sro.sussex.ac.uk/id/eprint/40025
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