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Social and Behavioral Sciences Commons™
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Full-Text Articles in Social and Behavioral Sciences
Fiscal Forecasts At The Fomc: Evidence From The Greenbooks, Dean D. Croushore, Simon Van Norden
Fiscal Forecasts At The Fomc: Evidence From The Greenbooks, Dean D. Croushore, Simon Van Norden
Economics Faculty Publications
This paper examines fiscal policy forecasts prepared for the Federal Open Market Committee and its influence on U.S. monetary policy. The forecasts contain useful information beyond that in the CBO’s forecasts. Fiscal forecast errors are only weakly correlated with forecast errors for inflation and output growth, but those for the budget surplus are highly correlated with those for the unemployment rate and the output gap. Some fiscal variables can also account for a significant fraction of the “exogenous” changes in the federal funds rate target that Romer and Romer (2004) studied, consistent with the board’s statements on the importance of …
How Do Forecasts Respond To Changes In Monetary Policy?, Laurence Ball, Dean D. Croushore
How Do Forecasts Respond To Changes In Monetary Policy?, Laurence Ball, Dean D. Croushore
Economics Faculty Publications
Just as changes in atmospheric conditions affect weather forecasts, changes in monetary policy affect economic forecasts. When monetary policy shifts, forecasters change their predictions about growth and inflation. But does the economy change to the same extent that forecasts do? In this article, Laurence Ball and Dean Croushore examine forecasts from the Survey of Professional Forecasters to determine if forecasts and the economy respond in tandem or if there are significant differences.
Low Inflation: The Surprise Of The 1990s, Dean D. Croushore
Low Inflation: The Surprise Of The 1990s, Dean D. Croushore
Economics Faculty Publications
For most of the 1990s, forecasters have been predicting an upturn in inflation. Yet, over that same period, the United States has experienced stable or declining inflation. Why have forecasts been at odds with reality? And why does it matter? In this article, Dean Croushore considers some answers to these questions and explains why inflation is the economic surprise of the decade.