S5 Ep24: Deep Focus: Consequences of European Central Bank forecasting errors

Bruegel senior scholar Zsolt Darvas speaks about his
review of systematic errors in ECB forecasting, in another
instalment of the Deep Focus podcast on 'The Sound of Economics'
channel


In this episode of the Deep Focus, Sean Gibson speaks with
Bruegel senior scholar Zsolt Darvas about his research on
European Central Bank forecasting.


Zsolt has analysed that, over the past five years, ECB forecasts
have proven to be systematically incorrect: core inflation
remained broadly stable at 1% despite the stubbornly predicted
increase, while the unemployment rate fell faster than predicted.


Such forecast errors, which are also inconsistent with each
other, raise serious doubts about the reliability of the ECB’s
current forecast of accelerating core inflation, and necessitates
a reflection on the inflation aim of the ECB.


You may also be interested in this blog post by Zsolt Darvas,
which contains charts illustrating just how erroneous the ECB's
forecasting on inflation and unemployment has become in recent
times.