Economic models and policy-making

By John Whitley of the Bank’s Conjunctural Assessment and Projections Division.

John Whitley outlines how large macroeconometric models were used in the 1970s and 1980s; the reasons why they did not meet the needs of policy-makers; and how the need to incorporate uncertainty about the workings of the economy into policy-making has led to a more eclectic and judgmental approach to models at the Bank of England.

Economic models and policy-making