Do FOMC members herd?

  • Twice a year FOMC members submit forecasts for growth, unemployment and inflation to be published in the Humphrey-Hawkins Report to Congress. In this paper we use individual FOMC forecasts to assess whether these forecasts exhibit herding behavior, a pattern often found in private sector forecasts. While growth and unemployment forecast do not show herding behavior, the inflation forecasts show strong evidence of anti-herding, i.e. FOMC members intentionally scatter their forecasts around the consensus. Interestingly, anti-herding is more important for nonvoting members than for voters.

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Metadaten
Author:Jan-Christoph Rülke, Peter Tillmann
URN:urn:nbn:de:hbz:992-opus4-4212
Series (Serial Number):WHU – Working Paper Series in Economics (WP 11/03)
Publisher:WHU – Otto Beisheim School of Management
Place of publication:Vallendar
Document Type:Working Paper
Language:English
Date of Publication (online):2017/06/15
Publishing Institution:WHU - Otto Beisheim School of Management
Release Date:2017/06/15
Tag:Geldpolitik; Herdentrieb; Prognose
Federal Open Market Committee; Forecasting; Herding; Monetary policy
Volume:2011
Issue:WP 11/03
Page Number:9
Institutes:WHU Economics Group / Chair of Monetary Economics
JEL-Classification:E Macroeconomics and Monetary Economics / E2 Macroeconomics: Consumption, Saving, Production, Employment, and Investment / E27 Forecasting and Simulation
E Macroeconomics and Monetary Economics / E4 Money and Interest Rates / E43 Determination of Interest Rates; Term Structure of Interest Rates
E Macroeconomics and Monetary Economics / E5 Monetary Policy, Central Banking, and the Supply of Money and Credit / E52 Monetary Policy
Licence (German):Copyright for this publication