Faculty Publications

Is Monetary Policy Important For Forecasting Real Growth And Inflation?

Document Type

Article

Keywords

Forecast accuracy, Monetary policy, Survey of Professional Forecasters

Journal/Book/Conference Title

Journal of Policy Modeling

Volume

27

Issue

2

First Page

177

Last Page

187

Abstract

We hypothesize that if monetary policy is important in explaining movements in output and inflation then it should follow that more accurate forecasts of monetary policy, on average, will tend to produce more accurate forecasts of growth and inflation. Using data from the Survey of Professional Forecasters we find that improved monetary policy forecast accuracy corresponds to lower variance of forecast errors for growth and inflation but very little reduction in the overall average size of forecast errors for growth and inflation. © 2005 Society for Policy Modelling. Published by Elsevier Inc. All rights reserved.

Department

Department of Economics

Original Publication Date

3-1-2005

DOI of published version

10.1016/j.jpolmod.2004.12.008

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