The Association between Macroeconomic Uncertainty and Analysts' Forecast Accuracy

Publication Type

Journal Article

Publication Date

2005

Abstract

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]

Discipline

Accounting | Finance and Financial Management

Research Areas

Financial Performance Analysis

Publication

Journal of International Accounting Research

Volume

4

Issue

1

First Page

23

Last Page

38

ISSN

1542-6297

Identifier

10.2308/jiar.2005.4.1.23

Publisher

American Accounting Association

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