Record number :
846259
Title of article :
Bias inFederalReserveinflationforecasts:IstheFederalReserve irrationalorjustcautious
Author/Authors :
CarlosCapistra´n، نويسنده ,
Issue Information :
روزنامه با شماره پیاپی سال 2008
Pages :
13
From page :
1415
To page :
1427
Abstract :
Inflation forecastsoftheFederalReserveseemtohavesystematicallyunder-predicted inflationfromthefourthquarterof1968untilVolcker’sappointmentasChairman,and to systematicallyover-predictitafterwardsuntilthesecondquarterof1998. Furthermore, underquadraticloss,commercialforecastsseemtohaveinformation not containedinthoseforecasts.Toinvestigatethecauseofthisapparentirrationality, this paperrecoversthelossfunctionimpliedbyFederalReserve’sinflationforecasts.The results suggestthatthecostofhavinginflationaboveanimplicittime-varyingtarget waslargerthanthecostofhavinginflationbelowitfortheperiodsinceVolcker,and that theoppositewastrueforthepre-Volckerera.Oncetheseasymmetriesaretaken into account,theFederalReserve’sinflationforecastsarefoundtoberational
Keywords :
ForecastevaluationMonetary policyReal-timedataSurveyofprofessionalforecasters
Journal title :
Journal of Monetary Economics
Serial Year :
2008
Link To Document :
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