Fed’s Shift to Data Dependence Foreshadowed in 2010 Projections
Bloomberg News on December 07, 2016
David Stockton, who spent 20 years at the Fed, including nine as director of research and statistics, said it’s important to understand that when economists make a forecast, they aren’t claiming to see the future, but rather declaring which version of the past is most likely to repeat. They may use increasingly sophisticated models, but it’s all about identifying what Stockton called “past empirical regularities.”
“The art of using those models is in understanding how you think those past empirical regularities will still hold,” said Stockton, now chief economist at LH Meyer Inc., a consulting firm in Washington