The effect of macroeconomic variables on analyst forecast properties

Abstract

This dissertation is organized into five chapters In chapter one I introduce the dissertation In chapter two I provide a review of the literature on analysts forecast properties that are relevant to this dissertation In chapter three I examine whether behavioral factors can explain analysts tendency to underreact to inflation when they forecast earnings The behavioral biases that I examine are salience fatigue multi tasking distraction and competition Using a sample of U S analysts for the years 1998 to 2016 I find that analysts do not fully incorporate inflation in their earnings forecasts when inflation is less salient I also find that analysts underreaction to inflation increases when they are fatigued when they multitask when they are distracted and when they face more competition from other analysts newline newline