Disagreement between FOMC members and the Fed’s staff: New insights based on a counterfactual interest rate

Bennani, Hamza; Kranz, Tobias; Neuenkirch, Matthias

doi:10.1016/j.jmacro.2018.09.002

Cited by 7 publications

(2 citation statements)

References 41 publications

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“…This work on the forecast heterogeneity of monetary policy committee member is related to a broader literature about monetary policy disagreement based on political affiliation (Bordo & Istrefi, 2018), career backgrounds (Eichler & Lahner, 2014), and regional conditions (Coibion & Goldstein, 2012; Jung & Latsos, 2015; Meade & Sheets, 2005). Policy preferences and forecast disagreement interact in important ways; for example, hawkishness is associated with higher‐than‐consensus inflation forecasts (Bennani et al., 2018; Eichler & Lahner, 2014; McCracken, 2010; Schultefrankenfeld, 2020). Moreover, non‐voting FOMC members may have strategic motives in forecasting, as they systematically overpredict inflation relative to the consensus if they prefer tighter monetary policy (Tillmann, 2011) and “anti‐herd” their inflation forecasts (Rülke & Tillmann, 2011).…”

Section: Forecasting Frameworkmentioning

confidence: 99%

Central bank forecasting: A survey

Binder

Sekkel

2023

Journal of Economic Surveys

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Central banks' forecasts are important monetary policy inputs and tools for central bank communication. We survey the literature on forecasting at the Federal Reserve, European Central Bank, Bank of England, and Bank of Canada, focusing especially on recent developments. After describing these central banks' forecasting frameworks, we discuss the literature on central bank forecast evaluation and new tests of unbiasedness and efficiency. We also discuss evidence of central banks' informational advantage over private sector forecasters, which appears to have weakened over time, and how central bank forecasts may affect private sector expectations even in the absence of an informational advantage. We discuss how the Great Recession led central banks to evaluate their forecasting frameworks, how the Covid‐19 pandemic has further challenged central bank forecasting, and directions for future research.

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Section: Forecasting Frameworkmentioning

confidence: 99%

Central bank forecasting: A survey

Binder

Sekkel

2023

Journal of Economic Surveys

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“…55Similar techniques have been used to analyze the informational content of FOMC transcripts (see Bailey & Schonhardt‐Bailey, 2008; Schonhardt‐Bailey, 2013; Fligstein et al., 2014; Hansen et al., 2018; Bennani & Romelli, 2021; Acosta,2023, among others).…”

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confidence: 99%

Central bank communication and social media: From silence to Twitter

Masciandaro

Peia

Romelli

2023

Journal of Economic Surveys

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This paper discusses the evolution of central bank communication, focusing on recent efforts by central banks to engage with a wider audience via social media. We document the social media presence of major central banks and discuss how analyzing Twitter content by and about monetary policy makers can inform about the effectiveness of communication in influencing beliefs. We focus on recent techniques employed in analyzing social media content in order to understand how central bank communication affects expectations and, subsequently, behavior in financial markets.

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The calculus of dissent: Bias and diversity in FOMC projections

Hogan

2022

Public Choice

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Disagreement between FOMC members and the Fed’s staff: New insights based on a counterfactual interest rate

Cited by 7 publications

References 41 publications

Central bank forecasting: A survey

Central bank forecasting: A survey

Central bank communication and social media: From silence to Twitter

The calculus of dissent: Bias and diversity in FOMC projections

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