How Might a Central Bank Report Uncertainty?
25 Pages Posted: 28 Mar 2014
Date Written: March 27, 2014
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: E50
Suggested Citation: Suggested Citation