Persistent Overoptimism about Economic Growth
Document Type
Blog Post
Publication Date
2-2-2015
Publisher
Federal Reserve Bank of San Francisco
Language
en-US
Abstract
Since 2007, Federal Open Market Committee participants have been persistently too optimistic about future U.S. economic growth. Real GDP growth forecasts have typically started high, but then are revised down over time as the incoming data continue to disappoint. Possible explanations for this pattern include missed warning signals about the buildup of imbalances before the crisis, overestimation of the efficacy of monetary policy following a balance-sheet recession, and the natural tendency of forecasters to extrapolate from recent data.
Recommended Citation
Kevin J. Lansing & Benjamin D. Pyle,
Persistent Overoptimism about Economic Growth
,
in
2015
FRBSF Economic Letters
(2015).
Available at:
https://scholarship.law.bu.edu/shorter_works/234
Publisher URL
https://www.frbsf.org/economic-research/publications/economic-letter/2015/february/economic-growth-projections-optimism-federal-reserve/
