Homepage
German economy in transition ‒ weak momentum, low potential growth The Joint Economic Forecast Project Group forecasts a 0.1% decline in Germany's gross domestic product in 2024.…
See page
Conditional Macroeconomic Survey Forecasts: Revisions and Errors
Alexander Glas, Katja Heinisch
Journal of International Money and Finance,
November
2023
Abstract
Using data from the European Central Bank's Survey of Professional Forecasters and ECB/Eurosystem staff projections, we analyze the role of ex-ante conditioning variables for macroeconomic forecasts. In particular, we test to which extent the updating and ex-post performance of predictions for inflation, real GDP growth and unemployment are related to beliefs about future oil prices, exchange rates, interest rates and wage growth. While oil price and exchange rate predictions are updated more frequently than macroeconomic forecasts, the opposite is true for interest rate and wage growth expectations. Beliefs about future inflation are closely associated with oil price expectations, whereas expected interest rates are related to predictions of output growth and unemployment. Exchange rate predictions also matter for macroeconomic forecasts, albeit less so than the other variables. With regard to forecast errors, wage growth and GDP growth closely comove, but only during the period when interest rates are at the effective zero lower bound.
Read article
Internationalisation
Internationalisation The Leibniz Institute for Economic Research Halle (IWH) is responsible for economic research and economic policy advice on a scientific basis. The institute…
See page
Department Profiles
Research Profiles of the IWH Departments All doctoral students are allocated to one of the four research departments (Financial Markets – Laws, Regulations and Factor Markets –…
See page
Board Announcements
Board Announcements June 25, 2024: Town Hall Meeting Mar 21, 2024: Town Hall Meeting Mar 8, 2024: Media contacts before the publication of the Joint Economic Forecast Spring 2024…
See page
Charts
Info Graphs Sometimes pictures say more than a thousand words. Therefore, we selected a few graphs to present our main topics visually. If you should have any questions or would…
See page
Ludwig (Interview)
About the CIA and a glass of red wine ... Professor Dr Udo Ludwig on the beginnings of our institute The core of the IWH founding team came from the Institute for Applied Economic…
See page
Loose (Interview)
When there were almost no flats in Halle yet ... Brigitte Loose about IWH's foundation and development Ms Loose, how did you experience the early days of IWH? Looking back, it was…
See page
Department Profiles
Research Profiles of the IWH Departments All doctoral students are allocated to one of the four research departments (Financial Markets – Laws, Regulations and Factor Markets –…
See page
Forecast Dispersion, Dissenting Votes, and Monetary Policy Preferences of FOMC Members: The Role of Individual Career Characteristics and Political Aspects
Stefan Eichler, Tom Lähner
Public Choice,
No. 3,
2014
Abstract
Using data from 1992 to 2001, we study the impact of members’ economic forecasts on the probability of casting dissenting votes in the Federal Open Market Committee (FOMC). Employing standard ordered probit techniques, we find that higher individual inflation and real GDP growth forecasts (relative to the committee’s median) significantly increase the probability of dissenting in favor of tighter monetary policy, whereas higher individual unemployment rate forecasts significantly decrease it. Using interaction models, we find that FOMC members with longer careers in government, industry, academia, non-governmental organizations (NGOs), or on the staff of the Board of Governors are more focused on output stabilization, while FOMC members with longer careers in the financial sector or on the staffs of regional Federal Reserve Banks are more focused on inflation stabilization. We also find evidence that politics matters, with Republican appointees being much more focused on inflation stabilization than Democratic appointees. Moreover, during the entire Clinton administration ‘natural’ monetary policy preferences of Bank presidents and Board members for inflation and output stabilization were more pronounced than under periods covering the administrations of both George H.W. Bush and George W. Bush, respectively.
Read article
