Economic analysis in a central bank: models versus judgement

This is the title of this very useful handbook by Lionel Price of Bank of England. The handbook was written in 1996 but is still a very decent read as a primer on economics models and how central banks use them. Though, it does not include an explanation for DSGE models.

One cannot copy the pdf content so cannot discuss much. Explains in English – structural models, atheoretic models and VAR models (a part of atheoretic models).

In the end Price says though models are useful one should always be sceptical of them. Sound economic theory is crucial to good models along with judgement and experience of the modeller.

Addendum:

One should check the other handbooks as well. Very very useful.

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