Economic Analysis in a Central Bank - Models Versus Judgment
AbstractCentral banks need to have sound systems for acquiring, sharing, and analysing economic and financial data so that they can respond quickly to unforeseen developments and steer monetary policy to achieve its objectives. Does this analysis have to rest largely on judgment, or can mathematical models of the economy be used to improve the process? In particular, as policy has to be set in relation to the future development of the economy, can models be used to forecast its course? This paper aims to explain the various types of models which central banks may use, and the advantages and disadvantages of each type. The overall message of the paper is that, when sufficient data are available, central banks should make some use of econometric techniques and of models to improve their understanding of how their economy works and to make forecasts. But these techniques should be used to support good economic analysis, and not as a substitute for it. This handbook is also available in Russian and Spanish.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoThis book is provided by Centre for Central Banking Studies, Bank of England in its series Handbooks with number 3 and published in 1996.
ISBN: 1 85730 034 3 (English) 1 85730 039 4 (Russian)
Contact details of provider:
Postal: Threadneedle Street, London, EC2R 8AH
Phone: +44 (020) 7601 4444
Fax: +44 (020) 7601 5460
Web page: http://www.bankofengland.co.uk/education/Pages/ccbs/default.aspx
More information through EDIRC
You can help add them by filling out this form.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Maria Brady).
If references are entirely missing, you can add them using this form.