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Uncertainty and Disagreement in Economic Prediction: The Bank of England Survey of External Forecasters

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  • Gianna Boero
  • Jeremy Smith
  • Kenneth F. Wallis

Abstract

This article introduces a new source of survey data, namely the Bank of England Survey of External Forecasters. The survey collects point and density forecasts of inflation and GDP growth and, hence, offers the opportunity of constructing direct measures of uncertainty. We present a simple statistical framework in which to define and interrelate measures of uncertainty and disagreement. The resulting measures are compared with other direct measures of uncertainty, nationally and internationally. A significant, sustained reduction in inflation uncertainty followed the 1997 granting of operational independence to the Bank of England to pursue a monetary policy of inflation targeting.

Suggested Citation

  • Gianna Boero & Jeremy Smith & Kenneth F. Wallis, 2008. "Uncertainty and Disagreement in Economic Prediction: The Bank of England Survey of External Forecasters," Economic Journal, Royal Economic Society, vol. 118(530), pages 1107-1127, July.
    • Handle: RePEc:wly:econjl:v:118:y:2008:i:530:p:1107-1127
    DOI: 10.1111/j.1468-0297.2008.02162.x
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • C42 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Survey Methods
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles

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