Thus they may be used for communication purpose and/or may experience political pressures in a way that the Greenbook forecasts are not affected because they are released with a 5 year lag. 2 One reason why the FOMC projections are less accurate is that they are released immediately. These comparisons often find that the Greenbook forecasts are of higher quality than the FOMC forecasts. These forecasts are often compared with the predictions made by members of the FOMC. The Greenbook forecasts have been evaluated many times (e.g. They are prepared by the Federal Reserve staff before each Federal Open Market Committee (FOMC) meeting, and are shared with the FOMC members before each scheduled meeting. It is important to note that the Greenbook forecasts play a central role in the formulation of monetary policy. 1 Given the importance of the Federal Reserve’s forecasts to monetary policy, it is of considerable interest then to determine whether the revisions of these forecasts have the same attributes that have been observed in studies of other forecasts. Recently, there has been considerable interest in the subject of forecast revisions and the interpretations of the results of these studies. Previous studies, however, have given little consideration to how the Greenbook forecasts have been revised and the statistical properties of these revisions. These evaluations have primarily focused on the forecasts themselves, their accuracy, and whether they were rational. Over the years, the economic forecasts of the Federal Reserve staff, reported in the Greenbook, have been evaluated extensively.
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