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This paper presents new evidence on the expectation formation process of firms from a survey of the German manufacturing sector. It focuses on the expectation about their future business conditions, which enters the widely followed economic sentiment index and which is an important determinant of their employment and investment decisions. We find that firms extrapolate their experience too much and make predictable forecasting errors. Moreover, firms do not seem to anticipate the upcoming reversals of business cycle peaks and troughs which causes suboptimal adjustment of investment and employment and affects their inventories and profits. However, the impact on expectation errors decreases with the size and the age of the firm as firms learn to reduce their extrapolation bias over time.
Various aspects of uncertainty have become topical in pest risk modelling discussions. A recent contribution to the literature sought to explore the effect of taxonomic uncertainty on modelled pest risk. The case study involved a high profile plant pathogen Puccinia psidii, which causes a major disease of plants within the Myrtaceae family. Consequently, the results and recommendations may attract a wide range of interest in the biosecurity and pest risk modelling communities. We found the study by Elith et al. (2013) included a number of methodological issues that limit some of the specific and general conclusions reached in the paper. We discuss these issues and the ensuing implications for biosecurity management. We also draw attention to the need for pest risk modellers and biosecurity managers to find ways to communicate more effectively. We urge modellers and managers alike to develop a better understanding of the challenges and limitations of modelling species potential distributions across novel climates, and to be able to appreciate the meanings and limitations of models framed in different ways.