2023-11-08 15:49:00
Federal Reserve Chairman Jerome Powell said on the 8th that the central bank needs to think beyond the complex mathematical simulations it has traditionally used to predict the economy.
“Intellectual rigor must be combined with flexibility and agility,” he said at the beginning of a conference celebrating the 100th anniversary of the Fed’s Research and Statistics (R&S) division.
“Even with the most advanced models, the economy can sometimes behave in unexpected ways, even during relatively calm times.” “Economies are flexible and dynamic, and can be subject to unpredictable shocks, such as global financial crises or pandemics. At such times, forecasters must think outside the box. ” he said.
The R&S Division provides economic forecasts to the Federal Open Market Committee (FOMC) eight times a year.
Chairman Powell did not discuss monetary policy or the outlook for the economy.
news-rsf-original-reference paywall">Original title:Powell Urges Fed Economists to Be Flexible on Forecast Methods(excerpt)
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