(THREAD) We use macroeconomic models to help prepare our monetary policy decisions and build baseline projections. We conducted an assessment of these models as part of our strategy review ecb.europa.eu/pub/pdf/scpops…
1/5
1/5
A suite-of-models approach is typically used across the Eurosystem. Although this approach was already in use during our 2003 strategy review, now we use a wider variety of models and existing models have been improved
2/5
2/5
The models we use provide a flexible framework for conducting projection exercises and analysing alternative policy options. The suite-of-models approach achieves a good balance between model diversity and specialisation for different uses
3/5
3/5
Macroeconomic models can be further enhanced, for example by:
1⃣ specifying the expectations formation process
2⃣ accounting for exogenous long-term trends
3⃣ adapting them to things like climate change and larger shocks such as the coronavirus pandemic
4/5
1⃣ specifying the expectations formation process
2⃣ accounting for exogenous long-term trends
3⃣ adapting them to things like climate change and larger shocks such as the coronavirus pandemic
4/5
Want to know who contributed to this research? Check out the list of all authors and contributors from the ECB and national central banks across the euro area in the full occasional paper ecb.europa.eu/pub/pdf/scpops…
5/5
5/5
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