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FOMC forecasts and economic policy uncertainty

Author

Listed:
  • Dandan Liu

    (Kent State University)

  • Michael A Ellis

    (Kent State University)

Abstract

This paper investigates the influence of economic policy uncertainty on Federal Open Market Committee (FOMC) meeting participants' economic forecasts. We find evidence that during periods when the public had increased uncertainty about economic policy there was little change in the dispersion of views by FOMC meeting participants about the future path of inflation, consistent with increased emphasis on inflation objectives prior to formal inflation targeting. In contrast, there was increased dispersion of FOMC unemployment rate forecasts.

Suggested Citation

  • Dandan Liu & Michael A Ellis, 2021. "FOMC forecasts and economic policy uncertainty," Economics Bulletin, AccessEcon, vol. 41(2), pages 213-221.
    • Handle: RePEc:ebl:ecbull:eb-20-00782
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2021/Volume41/EB-21-V41-I2-P20.pdf
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    References listed on IDEAS

    as
    1. Stefan Eichler & Tom Lähner, 2014. "Forecast dispersion, dissenting votes, and monetary policy preferences of FOMC members: the role of individual career characteristics and political aspects," Public Choice, Springer, vol. 160(3), pages 429-453, September.
    2. Peter Tillmann, 2020. "Monetary Policy Uncertainty and the Response of the Yield Curve to Policy Shocks," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 52(4), pages 803-833, June.
    3. Michelle Alexopoulos & Jon Cohen, 2009. "Uncertain Times, uncertain measures," Working Papers tecipa-352, University of Toronto, Department of Economics.
    4. Alessandro Riboni & Francisco J. Ruge-Murcia, 2008. "The Dynamic (In)Efficiency of Monetary Policy by Committee," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 40(5), pages 1001-1032, August.
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    6. Nick Bloom & Stephen Bond & John Van Reenen, 2007. "Uncertainty and Investment Dynamics," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 74(2), pages 391-415.
    7. Nicholas Bloom, 2009. "The Impact of Uncertainty Shocks," Econometrica, Econometric Society, vol. 77(3), pages 623-685, May.
    8. R?diger Bachmann & Steffen Elstner & Eric R. Sims, 2013. "Uncertainty and Economic Activity: Evidence from Business Survey Data," American Economic Journal: Macroeconomics, American Economic Association, vol. 5(2), pages 217-249, April.
    9. Scott R. Baker & Nicholas Bloom & Steven J. Davis, 2016. "Measuring Economic Policy Uncertainty," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(4), pages 1593-1636.
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    Cited by:

    1. Çağlayan Aslan & Şenay Açikgöz, 2025. "Technology Level Exports, Global Economic Policy Uncertainty, and the Role of Government: A Panel Svar Analysis," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 16(6), pages 18805-18830, December.

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    Keywords

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    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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