Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/297403 
Year of Publication: 
2023
Series/Report no.: 
Bank of Canada Staff Working Paper No. 2023-18
Publisher: 
Bank of Canada, Ottawa
Abstract: 
Central banks' forecasts are important monetary policy inputs and tools for central bank communication. We survey the literature on forecasting at the Federal Reserve, European Central Bank, Bank of England and Bank of Canada, focusing especially on recent developments. After describing these central banks' forecasting frameworks, we discuss the literature on central bank forecast evaluation and new tests of unbiasedness and efficiency. We also discuss evidence of central banks' informational advantage over private sector forecasters-which appears to have weakened over time-and how central bank forecasts may affect private sector expectations even in the absence of an informational advantage. We discuss how the Great Recession led central banks to evaluate their forecasting frameworks and how the COVID-19 pandemic has further challenged central bank forecasting. Finally, we consider directions for future research.
Subjects: 
Monetary policy
JEL: 
E47
E52
E58
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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