The role of central bank transparency for guiding private sector forecasts by Michael Ehrmann,

Private sector forecasters need to ensure that their exposure to lawsuits is limited

of simple models to measure the impact of inflation targeting on the dispersion of private sector forecasts of inflation. Using a panel data set that includes 15 countries over 20 years we find no convincing evidence that adopting an inflation targeting regime leads to a reduction in the dispersion

. Governments can also use models to measure the impact of policy changes on the economy. Private sector companies, by contrast, have diverse information needs. Macroeconomic variables which are very important to some firms may be less important to others. Many firms want to have an idea of where the economy

Authorized for distribution by Paolo Mauro

at the Federal Reserve Bank of Kansas City. This paper was prepared for the 6th Norges Bank Monetary

Abstract not found

more detailed information about the monetary policy process. The Federal Reserve has taken a number of actions to promote transparency including, most recently, the announcement of enhancements to the FOMC’s economic forecasts that are released to the public (Federal Open Market Committee

. As organizations in both the private and the public sectors routinely exchange such information, individ.uals have no way of knowing if the information is inaccurate, obsolete, or otherwise inappropriate. The foundation is being laid for a dossier society, in which computers could be used to infer individuals

This paper evaluates the performance of Consensus Forecasts of real GDP growth for a large number of industrialized and developing countries for the time period October 1989 to December 1999. The questions addressed are the following: How accurate are private sector forecasts? How does