Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. " Public Debt Accumulation in SSA: A Looming Debt Crisis ," Michael Atingi-Ego & Sayed Timuno & Tiviniton Makuve, 2021." Back to the real economy: the effects of risk perception shocks on the term premium and bank lending," Bluwstein, Kristina & Yung, Julieta, 2019." Text-mining IMF country reports - an original dataset,"ġ00656, University Library of Munich, Germany. " Overfitting in Judgment-based Economic Forecasts: The Case of IMF Growth Projections," International Journal of Forecasting, Elsevier, vol. " Are GDP forecasts optimal? Evidence on European countries," Giovannelli, Alessandro & Pericoli, Filippo Maria, 2020." The Rationality of USDA Forecasts under Multivariate Asymmetric Loss,"Īmerican Journal of Agricultural Economics, John Wiley & Sons, vol. International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. " Economic fitness: How equity market returns reflect the realization of economic growth potential," " Do Fiscal Rules Cause Better Fiscal Balances? A New Instrumental Variable Strategy," Francesca Caselli & Julien Reynaud, 2019.Journal of Policy Modeling, Elsevier, vol. A twist on the secular stagnation hypothesis," " Short-run effects of lower productivity growth. Blanchard, Olivier & Lorenzoni, Guido & L’Huillier, Jean-Paul, 2017." Growth Expectations, Undue Optimism, and Short-Run Fluctuations," Zeno Enders & Michael Kleemann & Gernot Müller, 2013.Enders, Zeno & Kleemann, Michael & Müller, Gernot J., 2017.Michael Kleemann & Gernot Mueller & Zeno Enders, 2015.Müller, Gernot & Enders, Zeno & Kleemann, Michael, 2016.VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic OrderĨ0009, Verein für Socialpolitik / German Economic Association. " Growth expectations, undue optimism, and short-run fluctuations," Enders, Zeno & Kleemann, Michael & Müller, Gernot, 2013.Our findings illustrate the potency of unjustified optimism and underline the importance of basing economic forecasts upon realistic medium-term prospects. The mechanism that transforms over-optimism into a later recession seems to run through higher debt accumulation, both public and private. As a necessary first step, we document that IMF Mission Chiefs tend to systematically differ in their individual degrees of forecast-optimism or caution. To isolate the causal effect of over-optimism we take an instrumental variables approach, where we exploit variation provided by the allocation of IMF Mission Chiefs across countries. To examine this question, we look at the medium-run effects of instances of over-optimism or caution in IMF forecasts. Our findings illustrate the potency of unjustified optimism and underline the importance of basing economic forecasts upon realistic medium-term prospects.Is over-optimism about a country's future growth perspective good for an economy, or does over-optimism also come with costs? In this paper we provide evidence that recessions, fiscal problems, as well as Balance of Payment-difficulties are more likely to arise in countries where past growth expectations have been overly optimistic. Is over-optimism about a country's future growth perspective good for an economy, or does over-optimism also come with costs? In this paper we provide evidence that recessions, fiscal problems, as well as Balance of Payment-difficulties are more likely to arise in countries where past growth expectations have been overly optimistic. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management. Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate.
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