A central bank only has data from the past. However, this data must be used to draw conclusions about the current state of the economy and to make decisions that point far into the future. Central bank policy has therefore been compared to driving a car without looking ahead, and only looking in the rearview mirror. – See astroforecasting, data uncertainty, survey of professional forecasters, monetary policy, forward-looking, equilibrium models, dynamic-stochastic, forecast uncertainty, sentiment indicators, stress test, caveats, trend forecasts, growth forecasting, economic indicators, important. – Cf. Bundesbank Monthly Bulletin of December 2007, pp. 28 ff. (basic article on forecasting uncertainties), Bundesbank Monthly Bulletin of June 2010, pp. 29 ff. (detailed exposition of forecasting problems; overviews; references), ECB Monthly Bulletin of May 2013, pp. 77 (fundamental article on the reliability of macroeconomic projections; many overviews; references), Monthly Report of the Deutsche Bundesbank of September 2013, pp. 69 ff. (workshop report outlining the issues arising in forecasting models; references).
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
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