Central banks need to avoid ‘overconfidence’, says RBA’s Hauser
Deputy governor warns against 'false prophets' when forecasting with point estimates
Relying too much on point estimates could lead to overconfidence when conducting forecasts, according to the deputy governor of the Reserve Bank of Australia (RBA).
Speaking to the Economic Society of Australia at Queensland University of Technology on August 12, Andrew Hauser said most models used for economic analysis were based on historical relationships between individual variables. If central bankers ran forecasts based on such data, he said, they risked becoming overconfident.
“Such model
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@centralbanking.com or view our subscription options here: http://subscriptions.centralbanking.com/subscribe
You are currently unable to print this content. Please contact info@centralbanking.com to find out more.
You are currently unable to copy this content. Please contact info@centralbanking.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@centralbanking.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@centralbanking.com
More on Economics
House prices react rapidly to rates shocks – BIS paper
Monetary policy transmission stronger in US property market than previously thought, study argues
Cash use supporting ‘shadow economy’ in Slovakia – study
Central bank research points to “substantial” activity intended to avoid regulatory scrutiny
Phasing out coal-fired power could ultimately pay for itself – BdF paper
Authors say gains from lower operating and finance costs could compensate for outlay costs
Former PBoC head urges efforts to fight deflationary pressure
Yi Gang highlights weak domestic demand and need for fiscal and monetary support
Phillips curve differs depending on labour market – Fed study
Research finds curve to be flat in normal markets and steep in tight ones
Credit expansion could dampen growth in EMEs – BIS bulletin
Shift in lending from manufacturing and into real estate is also affecting productivity
Bank closures lead to job cuts at small businesses – Fed study
Research finds that if 25% of local branches close, employment growth falls by four percentage points
Wildfire pollution depresses home values and rents – study
Dallas Fed research finds effects extend to areas “thousands of miles” from where fires take place