When people laugh at meetings of the Federal Open Market Committee (FOMC), the body that sets monetary policy for the Federal Reserve system, the transcript states: “[Laughter].” As a result, it’s easy to quantify how much funny business is going on at the Fed.
But not every year is created equal. 2008 was a terrible year for Fed humor, which isn’t surprising—the global financial crisis was no laughing matter. (Incidentally, we suspect that our Brookings colleague Bernanke is responsible for the 2006 boom—that’s when he became Chairman.)
Of course, these data are deeply suspect, because laughter is not binary—it’s on a continuum, and sometimes people just snicker.
After an exhaustive analysis, we determined that FOMC members laugh less when unemployment is high. The r-squared isn’t much to look at, but the data points produce a nice (and ultimately persuasive, we’re sure) line of best fit.
Our findings suggest that, with unemployment probing 10-year lows, the recent FOMC meeting must have been a hoot.