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Activity Number:
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223
- Forecasting for Policy in an Uncertain and Rapidly Changing World
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Type:
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Invited
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Date/Time:
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Tuesday, August 9, 2022 : 8:30 AM to 10:20 AM
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Sponsor:
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Business and Economic Statistics Section
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Abstract #320636
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Title:
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The Wisdom of Diversity in Committees
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Author(s):
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Neil R Ericsson* and David Hendry and Yanki Kalfa and Jaime Marquez
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Companies:
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Federal Reserve Board and Nuffield College and Rady School of Management and Johns Hopkins University
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Keywords:
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machine learning;
FOMC;
growth;
inflation;
unemployment;
forecasts
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Abstract:
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Since 1992, participants of the Federal Open Market Committee (the U.S. central bank's policymaking committee) have made twice-yearly forecasts of U.S. inflation, unemployment, and real growth. This paper assesses the value arising from diverse individual forecasts in a committee-based policy process by employing forecast-encompassing tests in conjunction with innovative saturation techniques with machine learning. We find that the Federal Reserve Bank presidents and the Federal Reserve Board governors bring distinct complementary information about an uncertain future U.S. economy to the FOMC meetings in their policy deliberations.
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Authors who are presenting talks have a * after their name.
