DOI
10.1162/rest_a_00664
Abstract
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 fiscal policy.
Document Type
Article
Publication Date
2018
Publisher Statement
Copyright © 2018 MIT Press. This article first appeared in The Review of Economics and Statistics 100:5 (2018), 933-945.
Please note that downloads of the article are for private/personal use only.
Recommended Citation
Croushore, Dean and Simon van Norden. “Fiscal Forecasts at the FOMC: Evidence from the Greenbooks.” The Review of Economics and Statistics 100, no. 5 (December 2018): 933-945. https:doi.org/ 10.1162/rest_a_00664.