Could commercial forecasts of July inflation have been improved by knowing that the Fed would stand pat?
The three researchers asked whether knowing the Fed's action in advance could add any predictive power to commercial forecasts of what the report would say.
Every weather service in America from TV-station predictions to commercial forecasts—is based on the data provided as a public service by the National Oceanic and Atmospheric Administration.
Last March, noting the lengthening commercial forecasts, the American Meteorological Society -- the largest organization of American atmospheric scientists -- issued a statement essentially repudiating the idea that local weather could be accurately forecast two weeks ahead.
There is also no independent organization that tracks the performance of commercial forecasts, so it is up to people using the services to judge how, say, today's two-week forecast for Cleveland matches up with what conditions actually occur there two weeks from now.
The most likely explanation for the Fed's superiority in forecasting inflation, the Romers say, is that the Fed devotes "far more resources to forecasting than even the largest commercial forecasters".
Their results, published two years ago, suggest that "commercial forecasters would find it nearly optimal to discard their forecasts and adopt the Federal Reserve's".
Russia is just starting work on up to 10 relief ports along the route, search and rescue capability is patchy, commercial weather forecasting is limited and insurers charge a large premium for operators using the route.
In what may be the worst-kept secret in the business, numerous commercial weather forecasts are also biased toward forecasting more precipitation than will actually occur.
Forecasting Commercial Electricity Sales (with L.M. Pastuszek and E. Cody), Journal of Forecasting, Vol 6, Number 2, pp April-June 1987 pp. 117-136.
