It is the shape of such dispersion that strikes us as particularly important. It seems that, wherever we look, the snapshot for “consensus expectations” has shifted: from traditional bell-shaped curves – with a high likelihood mean and thin tails (indicating most economists have similar expectations) – to a much flatter distribution of outcomes with fatter tails (where opinion is divided and expectations vary considerably).
Commentary of Richard Clarida, Columbia University and Mohamed El-Erian, CEO of PIMCO, the global player in fixed-income management.
Remember the Camp View and dispersion of inflation forecasts? Feel free to find out more on the camp view, here and here.
