Poloz considers the future of economic modelling
Theoretical and empirical two-pronged approach likely to stay, governor says
The future of economic models could lie with agent-based models, the governor of the Bank of Canada has suggested.
Speaking in Edmonton on January 31, Stephen Poloz looked at how economic models have evolved over time, building on the strengths of their predecessors while fixing problems.
"A forecaster can rationalise a string of prediction errors for a while and adjust his or her judgement around the outlook accordingly, but eventually the time comes to rebuild the model," he said.
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