Blue Chip Rationality Tests

Abstract

This paper tests the rationality of forecasts made by individuals who contribute to the Blue Chip consensus forecasting service and tries, by means of a questionnaire on forecasting methods, to establish why some forecasters appear more rational than others. Tests based on consensus forecasts prove unreliable as guides to the number of individuals who produce rational forecasts. Individual forecasts are more likely to be rational if they are based on a mainstream economic theory and incorporate a substantial element of judgment. Copyright 1991 by Ohio State University Press.