There’s More Laughter Among U.S. Monetary Policy Makers When Inflation Worries Are High

In meetings of the U.S. monetary-policy-setting Federal Open Market Committee, a member tends to elicit more laughter if he or she expects inflation to be higher in the coming year, according to an analysis of transcripts by American University doctoral candidate Kevin W. Capehart. A 1 percentage point increase in a member’s inflation forecast is associated with a one-half-laugh, or 75%, increase in the amount of laughter elicited by his or her witticisms during a meeting at the time of the forecast. Humor has been shown to be a mechanism for coping with the psychological stress of a perceived threat, Capehart says.