This paper analyses how firm-specific forecast errors derived from survey data of German manufacturing firms over 2007 …-2011 affect firms' investment propensity. Understanding how forecast errors affect firm investment behaviour is key to mitigate … economic downturns during and after crisis periods in which forecast errors tend to increase. Our findings reveal a negative …

realized sales, we document that only major forecast errors are predictable and display autocorrelation. This result is a … forecast errors are neither predictable nor autocorrelated. To arrive at this result, we develop a novel methodology to … environments where information processing is more costly. This results in major forecast errors that are predictable and …

forecast errors. However, they make more precise forecasts and less correlated forecast errors when they become more …

that in ation expectations affect both the dispersion across forecasters and realized forecast errors. …