On the Purpose of Models - the Norges Bank Experience

Bericht

Macroeconomic models are important ingredients in the monetary policy process, and, in the Norwegian case, projecting a forward interest rate path. In this paper we argue that when deciding on a model strategy, it is crucial to consider the purpose of models. If the purpose is to understand basic mechanisms in the economy and implications of economic policy, we need a set of models that highlight these features. If the purpose is to forecast short-term developments, a different set of models may be required. Given the complexity of the real world, we argue that it is better to provide the policymakers with a good characterization of uncertainty instead of only providing point forecasts, i.e. it is better to be "roughly right" than "exactly wrong". A robust strategy for handling uncertainty should be an inherent part of the preferred system of models.

Angaben zum Objekt

• ISBN: 978-82-7553-612-7
• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Staff Memo ; No. 06/2011

Klassifikation und Themen

• Klassifikation: Wirtschaft
• Thema: forecasting ; forecast combination ; monetary policy ; robustness

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Gerdrup, Karsten R. ; Nicolaisen, Jon
• Ereignis: Veröffentlichung
• (wer): Norges Bank
• (wo): Oslo
• (wann): 2011

Weitere Informationen

• Handle: http://hdl.handle.net/10419/210222
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ