Commodity Prices, Interest Rate Spreads and the Exchange Rate: Useful Monetary Policy Indicators or Redundant Information?
We employ actual data from both private and public sector forecasters to conduct a simple, yet stringent test of the potential usefulness of indicator variables for the conduct of monetary policy. That is, we examine whether commodity prices, interest rate spreads and exchange rates can explain incipient errors in the economic forecasts developed by the Fed's staff and the ASA-NBER panel. Our results suggest that these variables do not contain additional information beyond that which policymakers have already incorporated in their forecasts. Hence, monitoring these variables further will not significantly enhance the accuracy of their forecasts, as the information in these variables is largely redundant.
Volume (Year): 25 (1999)
Issue (Month): 2 (Spring)
|Contact details of provider:|| Postal: |
Phone: (201) 684-7346
Web page: http://www.ramapo.edu/eea/journal.html
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:eej:eeconj:v:25:y:1999:i:2:p:129-140. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Victor Matheson, College of the Holy Cross)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.