The AFR has reported that the way that the RBA makes rate decisions has come in for a review. The newspaper reports that the review expressed concerns that RBA’s forecasters focus too much on “gut feel” judgments and not enough on hard models. Concerns were also expressed that the bank may not be analysing the right things, given the seizmic changes to the Australian economy over recent years as well as the competence of the bank’s research and analysis teams to do the job properly. The AFR also reports that the review also called for reflection on why previous forecasts turned out wrong.
RBA forecasting review
03 June 2015
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