Evaluating A Vector Of The Fed’S Forecasts
In this paper we present a multivariate analysis of the Federal Reserve’s forecasts. First, we evaluate the Fed’s forecasts of the ten major expenditure categories of real GDP. Second, we present a new methodology for evaluating multivariate forecasts. Finally, we use the same methodology to determine whether the Fed’s forecasts of GDP growth, inflation, and unemployment taken together present an accurate overall view of the economic situation and compare the Fed’s forecasts to those of the Survey of Professional Forecasters. We find that the Fed’s forecasts were generally consistent with the overall conditions that actually occurred. We also find that the Fed’s forecasts and those of the Survey of Professional Forecasters are quite similar overall.
|Date of creation:||Jan 2012|
|Date of revision:|
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2008-06, The George Washington University, Institute for International Economic Policy.
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"Examining the Quality of Early GDP Component Estimates,"
2011-001, The George Washington University, Department of Economics, Research Program on Forecasting, revised Dec 2011.
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