Majority of central banks do not take account of forecast errors
Surveys of inflationary expectations used widely, alongside macroeconomic and market indicators
Central banks deploying a range of mechanisms to measure the effectiveness of their efforts to maintain price and economic stability.
The most popular measures are macroeconomic indicators such as inflation and GDP – all 34 respondents to this question, as part of the Monetary Policy Benchmarks 2021, said they use them.
Market indicators, such as market rates (94%) and surveys of inflationary expectations (79%), were also widely used. Meanwhile, forecast errors were evaluated by less than half
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