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Do FOMC forecasts add value to staff forecasts?

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  • Ellis, Michael A.
  • Liu, Dandan

Abstract

This paper compares the economic forecasts of members of the Board of Governors and presidents of the Federal Reserve Banks, and then investigates the value of each group's forecasts in supplementing the forecasts of the Board of Governors' staff. We find that the presidents tend to forecast higher inflation and real GDP growth, and lower unemployment than the members of the Board of Governors. We also find that the presidents' real GDP and unemployment rate forecasts add value to the real economy forecasts of the staff, while the governors' inflation forecasts add value to the staff's inflation forecasts.

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Bibliographic Info

Article provided by Elsevier in its journal European Journal of Political Economy.

Volume (Year): 32 (2013)
Issue (Month): C ()
Pages: 332-340

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Handle: RePEc:eee:poleco:v:32:y:2013:i:c:p:332-340

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Web page: http://www.elsevier.com/locate/inca/505544

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Keywords: Federal Open Market Committee; Forecasting;

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References

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  9. Havrilesky, Thomas & Gildea, John A, 1991. "The Policy Preferences of FOMC Members as Revealed by Dissenting Votes," Journal of Money, Credit and Banking, Blackwell Publishing, Blackwell Publishing, vol. 23(1), pages 130-38, February.
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  12. Fendel, Ralf & Rülke, Jan-Christoph, 2012. "Are heterogeneous FOMC forecasts consistent with the Fed’s monetary policy?," Economics Letters, Elsevier, Elsevier, vol. 116(1), pages 5-7.
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  14. Christina D. Romer & David H. Romer, 2008. "The FOMC versus the Staff: Where Can Monetary Policymakers Add Value?," American Economic Review, American Economic Association, American Economic Association, vol. 98(2), pages 230-35, May.
  15. Johnson, Eric D. & Ellis, Michael A. & Kotenko, Diana, 2012. "Consensus building on the FOMC: An analysis of end of tenure policy preferences," Economics Letters, Elsevier, Elsevier, vol. 117(1), pages 368-371.
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