CFDP 1943

How Might a Central Bank Report Uncertainty?

Author(s): 

Publication Date: March 2014

Pages: 24

Abstract: 

An important question for central banks is how they should report the uncertainty of their forecasts. This paper discusses a way in which a central bank could report the uncertainty of its forecasts in a world in which it used a single macroeconometric model to make its forecasts and guide its policies. Suggestions are then made as to what might be feasible for a central bank to report given that it is unlikely to be willing to commit to a single model. A particular model is used as an illustration.

Keywords: 

Central Bank, Uncertainty, Stochastic simulation

JEL Classification Codes:  E50