Goodhart Questions Utility of Central Banks Forecasting

Date: 02 February 2012

Source: FT

“Neither central bankers, nor anyone else, have a good way of predicting future fluctuations in either output, inflation or interest rates more than a few quarters ahead”. This is the main theme of the article written by Charles Goodhart that appeared today in the Financial Times. In the article, the London School of Economics Professor Emeritus, stresses the fact that with such an uncertain market, the likelihood of any forecast being accurate is very low, and therefore questions  the need for the central banks’ continuous long term forecasts.