An Analysis of the Eurosystem/ECB Projections

70 Pages Posted: 12 Jun 2019

See all articles by Georgios Kontogeorgos

Georgios Kontogeorgos

European Central Bank (ECB)

Kyriacos Lambrias

European Central Bank (ECB)

Date Written: June 11, 2019

Abstract

The Eurosystem/ECB staff macroeconomic projection exercises constitute an important input to the ECB's monetary policy. This work marks a thorough analysis of the Eurosystem/ECB projection errors by looking at criteria of optimality and rationality using techniques widely employed in the applied literature of forecast evaluation. In general, the results are encouraging and suggest that Eurosystem/ECB staff projections abide to the main characteristics that constitute them reliable as a policy input. Projections of GDP - up to one year - and inflation are optimal - in the case of inflation they are also rational. A main finding is that GDP forecasts can be substantially improved, especially at long horizons.

Keywords: Eurosystem/ECB forecasts, forecast evaluation, forecast errors

JEL Classification: C53, E37, E58

Suggested Citation

Kontogeorgos, Georgios and Lambrias, Kyriacos, An Analysis of the Eurosystem/ECB Projections (June 11, 2019). ECB Working Paper No. 2291 (2019); ISBN 978-92-899-3553-1 . Available at SSRN: https://ssrn.com/abstract=3402868

Georgios Kontogeorgos

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Kyriacos Lambrias (Contact Author)

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

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