Arbeitspapier
Geography or skills: what explains Fed Wachters' forecast accuracy of US monetary policy?
The paper shows that there is a substantial degree of heterogeneity in the ability of Fed watchers to forecast US monetary policy decisions. Based on a novel database for 268 professional forecasters since 1999, the average forecast error of FOMC decisions varies 5 to 10 basis points between the best and worstperformers across the sample. This heterogeneity is found to be related to both the skills of analysts - such as their educational and employment backgrounds - and to geography. In particular, forecasters located in regions which experience more idiosyncratic economic conditions perform worse in anticipating monetary policy. This evidence is indicative that limited attention and heterogeneous priors are present even for anticipating important events such as monetary policy decisions. Moreover, the paper shows that such heterogeneity is economically important as it leads to greater financial market volatility after FOMC meetings. Finally, policy-makers are not impotent in influencing such heterogeneity as Fed communication is found to affect forecast accuracy significantly.
- ISBN
-
3938369825
- Sprache
-
Englisch
- Erschienen in
-
Series: Diskussionsbeiträge ; No. 2008/11
- Klassifikation
-
Wirtschaft
Monetary Policy
Central Banks and Their Policies
Information and Market Efficiency; Event Studies; Insider Trading
- Thema
-
Monetary policy
forecast
Federal Reserve
FOMC
geography
skills
heterogeneity
survey data
communication
United States.
Geldpolitik
Zentralbank
Wirtschaftswissenschaftler
Konjunkturprognose
Bewertung
USA
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Berger, Helge
Ehrmann, Michael
Fratzscher, Marcel
- Ereignis
-
Veröffentlichung
- (wer)
-
Freie Universität Berlin, Fachbereich Wirtschaftswissenschaft
- (wo)
-
Berlin
- (wann)
-
2008
- Handle
- Letzte Aktualisierung
- 10.03.2025, 11:42 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Berger, Helge
- Ehrmann, Michael
- Fratzscher, Marcel
- Freie Universität Berlin, Fachbereich Wirtschaftswissenschaft
Entstanden
- 2008
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