The Wisdom of Committees

• Activity Number: 169 - Macroeconomic Dynamics
• Type: Contributed
• Date/Time: Monday, July 30, 2018 : 10:30 AM to 12:20 PM
• Sponsor: Business and Economic Statistics Section
• Author(s): Neil R Ericsson* and David F Hendry and S. Yanki Kalfa and Jaime Marquez
• Companies: Federal Reserve Board and University of Oxford and SAIS and SAIS
• Keywords: FOMC; forecasts; GDP; growth; unemployment; inflation

Abstract

Since 1992, participants of the Federal Open Market Committee have made twice-yearly forecasts of U.S. inflation, unemployment, and real growth. This paper assesses the value arising from individual forecasts in a committee-based policy process by employing forecast-encompassing tests in conjunction with saturation techniques. We find that the Federal Reserve Bank presidents and the Federal Reserve Board governors bring distinct complementary information about the U.S. economy to the FOMC meetings.