Showing posts with label inflation forecasting. Show all posts
Showing posts with label inflation forecasting. Show all posts

Friday, September 22, 2017

Tim Wallace — Inflation is getting harder to understand, central banker warns


No, inflation is not getting harder to "understand." Central banks are just using models that don't fit the case, for example, confusing special case model with general models, or using models that are mis-specified. 

The message is to review the assumptions, including methodological ones, and revise them as appropriate. Then compare the model with the real world.

What's so difficult to understand about that? This is what scientists do.

Difficult, you say? That's what you are getting paid for. If you don't have the chops, then resign and do something you can handle. 

Maybe others have a better handle on it. Give them a shot.

The Telegraph
Inflation is getting harder to understand, central banker warns
Tim Wallace