Journal article

Publication year: 2011

Pages: 547-553

Journal: European Journal of Political Economy

Volume number: 27

Issue number: 3

Open access status: Green

DOI Link: https://doi.org/10.1016/j.ejpoleco.2011.01.006

Publisher: Elsevier

Abstract: 

The Federal Open Market Committee (FOMC) of the Federal Reserve consists of voting and nonvoting members. Apart from deciding about interest rate policy, members individually formulate regular inflation forecasts. This paper uncovers systematic differences in individual inflation forecasts submitted by voting and non-voting members. Based on a data set with individual forecasts recently made available it is shown that non-voters systematically overpredict inflation relative to the consensus forecast if they favor tighter policy and underpredict inflation if they favor looser policy. These findings are consistent with non-voting member following strategic motives in forecasting, i.e. non-voting members use their forecast to influence policy.

Harvard Citation style: Tillmann, P. (2011) Strategic forecasting on the FOMC, European Journal of Political Economy, 27(3), pp. 547-553. https://doi.org/10.1016/j.ejpoleco.2011.01.006

APA Citation style: Tillmann, P. (2011). Strategic forecasting on the FOMC. European Journal of Political Economy. 27(3), 547-553. https://doi.org/10.1016/j.ejpoleco.2011.01.006