Marco Buti, Björn Döhring, 09 November 2017

The Eurozone economy is growing at its fastest rate in a decade, but the recovery remains incomplete. This column presents the European Commission’s autumn forecast, and derives some policy considerations. Accommodative macroeconomic policies are still appropriate for now. The column also highlights the need for structural policies to increase the potential for growth and help to share the benefits more fairly.

Neil Ericsson, 08 June 2017

Decisions by the Fed's Federal Open Market Committee are based in part on the Greenbook forecasts. These forecasts are produced by the Federal Reserve Board’s staff and are presented to the FOMC prior to their policy meetings, but are not made public for another five years. This column shows that the minutes of those FOMC meetings can help infer the Fed staff's Greenbook forecasts of the US real GDP growth rate, years before the Greenbook's public release. The FOMC minutes are thus highly informative about a key input to monetary policymaking.

Charles Manski, 24 December 2016

Exact predictions of policy outcomes and estimates of the state of the economy are routine; expressions of uncertainty are rare. This column argues that with the US approaching the beginning of an administration, the incredible certitude of past governmental policy analysis will soon seem a minor concern relative to what lies ahead.  Whereas analysis with incredible certitude makes predictions and estimates that are possibly true, analysis in a post-truth world makes predictions and estimates that are clearly false.

Nauro Campos, 04 August 2016

On 23 June 2016, 52% of British voters decided the UK should leave the European Union, in a decision that went against the advice of most economists. This column assesses the quality of that advice, and argues that while gaps in knowledge may have hindered forecasts, Brexit can essentially be put down to three things: an unnecessary manifesto pledge by David Cameron, a lack of engagement by the City in the Remain campaign, and the pro-Brexit stance of some of the UK's major newspapers. 

Graham Elliott, Allan Timmermann,

Policymakers use forecasting to attempt to assess the impact of major events, such as the recent Brexit vote, on the economy. While forecasting has improved dramatically in recent years, the models can still be greatly improved. This column discusses some of the limitations of forecasting models, and how policymakers can make their predictions more reliable. Key considerations are using more data to generate predictions, and using myriad models to eliminate individual misspecifications. 

Hassan Afrouzi, Olivier Coibion, Yuriy Gorodnichenko, Saten Kumar, 13 October 2015

The importance of the general public’s inflation expectations is increasingly being emphasised, but surveys of firms’ expectations are notably absent. This column explores the extent to which inflation expectations of firms in New Zealand are anchored. The findings indicate that managers show little anchoring of inflation expectations, despite 25 years of inflation targeting by the central bank. Most managers depend to a large extent on their personal shopping experience to make inferences about aggregate inflation.

Patrizio Pagano, Massimiliano Pisani, 21 May 2010

The price of oil plummeted during the global crisis, but has since started to climb back. Which way will the oil price go next? This column presents a new risk-adjusted method for forecasting oil prices using the futures market. It suggests that oil prices may climb back to $100 by early next year – a level that may dampen consumption spending.

Events