How Should the FED Report Uncertainty?
24 Pages Posted: 28 Jun 2012
Date Written: June 27, 2012
In January 2012 the Fed began reporting ranges of its economic forecasts. The ranges, however, measure differences of opinion, not variances of economic forecasts. This paper discusses what the Fed could report in a world in which it used a single macroeconometric model to make its forecasts and guide its policies. Suggestions are then made as to what might be feasible for the Fed to report given that it is unlikely to be willing to commit to a single model.
Keywords: Forecasting uncertainty, Fed policy
JEL Classification: E58
Suggested Citation: Suggested Citation