The Association between Macroeconomic Uncertainty and Analysts' Forecast Accuracy
This study examines whether macroeconomic uncertainty affects the forecast accuracy of financial analysts in an international setting. We use inflation and foreign exchange volatility as measures of macroeconomic uncertainty. We find strong evidence that forecast accuracy decreases in the level of macroeconomic uncertainty. Further, we document that the negative association between forecast accuracy and macroeconomic variables is more pronounced for emerging economies than developed economies. Overall our results suggest that macroeconomic uncertainty represents a unique dimension in the complexities associated with predicting future firm performance. [PUBLICATION ABSTRACT]
Accounting | Finance and Financial Management
Financial Performance Analysis
Journal of International Accounting Research
American Accounting Association
Hope, Ole-Kristian and Kang, Tony.
The Association between Macroeconomic Uncertainty and Analysts' Forecast Accuracy. (2005). Journal of International Accounting Research. 4, (1), 23-38. Research Collection School Of Accountancy.
Available at: http://ink.library.smu.edu.sg/soa_research/151