Monetary policy makers tend to laugh when inflation is on the up, but it’s more of a nervous giggle than a thigh-slapping, tear-inducing type.
A one percentage point increase in an inflation forecast brings about a 75% rise in laughter, according to a US study.
American University PhD student Kevin Capehart studied transcripts of the Federal Open Market Committee at the Federal Reserve. His findings are to be published next month in the Economic Enquiry journal.
The 12 members of the Federal Reserve committee, who meet eight times a year, are not likely to have heard much laughter lately.
Inflation hasn’t been a big issue for awhile. The Federal Reserve is more concerned about economic activity and growth.
Laughter usually comes in response to witticisms during a meeting at the time of the inflation forecast.
Humour has been shown to be a mechanism for coping with the stress of a perceived threat, according to the Harvard Business Review blog which reported the findings.
Inflation is low in Australia with the Consumer Price Index running at 2.4 per cent and is forecast steady for the current financial year. In the US, it’s lower at 1.5 per cent.
Australia’s Reserve Bank doesn’t release transcripts of board meetings. However, it’s fair to assume that, with inflation low, nervous giggles are at a mimimum.