Dispersion of FOMC Policymakers’ Views: Evidence from the New Individual Economic Projections

  • 研討會日期 : 2024-06-04
  • 時間 : 14:30
  • 主講人 : Prof. Natsuki Arai
  • 地點 : B110
  • 演講者簡介 : Professor Natsuki Arai received his PhD from Johns Hopkins University in 2014. He is an Assistant Professor at Gettysburg College. His research interests are Applied Macroeconomics and Forecasting.
  • 演講摘要 : This paper investigates the empirical properties of the FOMC’s new individual economic projections to find three sets of results. First, by applying the efficiency evaluations testing the unpredictability of forecast errors and revisions, this paper finds that the efficiency is rejected for many policymakers. The rejection is concentrated on particular periods and series—unemployment rate projections between 2009 and 2010, output growth between 2011 and 2013, and inflation projections for 2012. Second, this paper finds that the individual policymakers’ economic projections are largely consistent with macroeconomic principles, with robust Okun’s law, a weak Phillips curve, and a dispersed Taylor rule. Last, we find that policymakers’ economic projections are significantly associated with their status at the FOMC. Specifically, the regional bank presidents tend to forecast higher inflation and higher federal funds rate than governors. This result is partially explained by the difference in economic conditions of the districts that the regional bank president represents, as suggested by Meade and Sheets (2005).