[1] In the July August 1995 issue of the New England Economic Review, Stephen K. McNees of the Federal Reserve Bank of Boston presented an assessment of the relative accuracy of forecasts produced by the Congressional Budget Office (CBO), the Council of Economic Advisers (CEA), the Federal Open Market Committee (FOMC), and private sector forecasting firms. The table below, derived from Table 3 in McNees' article, presents data on the root mean squared forecast errors (RMSFE values) for forecasts of inflation and real GNP growth produced by the CBO, the CEA, and the private sector over the 1976-1994 period. Private Sector CBO 1.8 CEA 1.8 1.8 Variable CPI Inflation, Two-Year Average Growth Rate (measured in percentage points) Real GNP, Two-Year Average Growth Rate (measured in percentage points) Real GNP, Four-Year Average Growth Rate (measured in percentage points) Comment briefly on the relative forecast accuracy for each variable of the CBO, the CEA, and the private sector. [1] In the July August 1995 issue of the New England Economic Review, Stephen K. McNees of the Federal Reserve Bank of Boston presented an assessment of the relative accuracy of forecasts produced by the Congressional Budget Office (CBO), the Council of Economic Advisers (CEA), the Federal Open Market Committee (FOMC), and private sector forecasting firms. The table below, derived from Table 3 in McNees' article, presents data on the root mean squared forecast errors (RMSFE values) for forecasts of inflation and real GNP growth produced by the CBO, the CEA, and the private sector over the 1976-1994 period. Private Sector CBO 1.8 CEA 1.8 1.8 Variable CPI Inflation, Two-Year Average Growth Rate (measured in percentage points) Real GNP, Two-Year Average Growth Rate (measured in percentage points) Real GNP, Four-Year Average Growth Rate (measured in percentage points) Comment briefly on the relative forecast accuracy for each variable of the CBO, the CEA, and the private sector