Economic Quarterly

Comparison of three survey measures of one-year-ahead CPI inflation- Livingston, Michigan, and Professional Forecasters-permits assessment of their accuracy, predictive content, and rationality. The author uses the test of Granger-causality to investigate predictive content and real-time data on some pertinent variables to evaluate the rationality. His results indicate that the Michigan-median inflation forecasts are relatively the most accurate, unbiased, and efficient and have predictive content for actual future inflation. They also indicate that test results on the rationality of survey forecasts are not robust to the use of real-time data.