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Research by Edward Gamber, professor of economics and business, and Julie Smith, assistant professor of economics and business, was featured in The Wall Street Journal Online on Nov. 20. Their working paper “Has the Fed’s Forecasting Advantage Eroded?” was the subject of the “Real Time Economics” blog, which offers news, analysis, and commentary on the economy, Federal Reserve policy, and economics. The article has also been picked up by the Associated Press and ran on Forbes.com, Business Week.com, ATT.net, MSN.com, Yahoo.com, and numerous TV and radio station web sites nationwide.
Gamber and Smith’s paper argues that over the past few decades the Federal Reserve’s relative forecasting advantage over the private sector in regards to inflation has diminished. The research cites a number of reasons for this, but specifically the Fed’s move toward greater transparency in the mid 1990’s. Gamber and Smith have been working on this project in conjunction with the Research Program on Forcasting at George Washington University. This year, Gamber is serving as a visiting scholar in the department of economics at George Washington.