How Should the FED Report Uncertainty?

24 Pages Posted: 28 Jun 2012

See all articles by Ray C. Fair

Ray C. Fair

Yale University - Cowles Foundation; Yale School of Management - International Center for Finance

Date Written: June 27, 2012

Abstract

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

Fair, Ray C., How Should the FED Report Uncertainty? (June 27, 2012). Cowles Foundation Discussion Paper No. 1864. Available at SSRN: https://ssrn.com/abstract=2094349 or http://dx.doi.org/10.2139/ssrn.2094349

Ray C. Fair (Contact Author)

Yale University - Cowles Foundation ( email )

Box 208281
New Haven, CT 06520-8281
United States
203-432-3715 (Phone)
203-432-6167 (Fax)

HOME PAGE: http://fairmodel.econ.yale.edu

Yale School of Management - International Center for Finance ( email )

Box 208200
New Haven, CT 06520
United States
203-432-3715 (Phone)
203-432-6167 (Fax)

HOME PAGE: http://fairmodel.econ.yale.edu

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