Uncertainty is a ubiquitous concern emphasized by policymakers. We study how uncertainty affects decision-making by the Federal Open Market Committee (FOMC). We distinguish between the notion of Fed-managed uncertainty vis-a-vis uncertainty that emanates from within the economy and which the Fed...

Deviations from a policy rule underpin empirical identification of monetary policy shocks. We cast light on how deviations arise by analyzing internal policy deliberations of the Federal Open Market Committee (FOMC). We show that policymakers’ beliefs about higher-order moments of economic...

A statistical model is a class of probability distributions assumed to contain the true distribution generating the data. In parametric models, the distributions are indexed by a finite-dimensional parameter characterizing the scientific question of interest. Semiparametric models describe the...