Niveau: Supérieur, Doctorat, Bac+8
1 Central Bank Forecasts as an Instrument of Monetary Policy Paul Hubert * OFCE 2011 - 23 November 2011 Abstract Policymakers at the Federal Open Market Committee (FOMC) publish macroeconomic forecasts since 1979. Some studies find that these forecasts do not contain useful information to predict these macroeconomic variables compared to other forecasts. In this paper, we examine the value of publishing these FOMC forecasts in two steps. We assess whether they influence private forecasts and whether they may be considered as a policy instrument. We provide original evidence that FOMC forecasts are able to influence private expectations. We also find that FOMC forecasts give information about future Fed rate movements, affect policy variables in a different way from the Fed rate, and respond differently to macro shocks. JEL classification: E52, E58 Keywords: Monetary Policy, Forecasts, FOMC, Influence, Policy signals, Structural VAR. * I would like to thank Christophe Blot, Camille Cornand, Jérôme Creel, Michael Ehrmann, Harun Mirza, Francesco Saraceno and Xavier Timbeau for useful comments and suggestions, as well as seminar participants at OFCE. Email: . Address: OFCE (SciencesPo), 69 quai d'Orsay, 75340 Paris cedex 07.
- monetary policy
- central bank
- future fed
- inflation expectations
- influence private
- fed rate
- fomc forecasts