Forecast Accuracy and Monetary Policy
It has been suggested that the purpose of economic forecasting is to make weather forecasters look good by comparison. Despite their inaccuracies, though, forecasts of the economy must be useful, given the large number of them available and the relatively high cost of producing such information. Indeed, if forecasters can even marginally reduce uncertainty about future business conditions, the savings to business is potentially huge.
The views authors express in Economic Commentary are theirs and not necessarily those of the Federal Reserve Bank of Cleveland or the Board of Governors of the Federal Reserve System. The series editor is Tasia Hane. This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License. This paper and its data are subject to revision; please visit clevelandfed.org for updates.