The ESCB forecasting models: what are they and what are they good for?
Abigail Marie Rapa, Maria Christine Saliba & co-authors
This 
report provides a comprehensive overview of the models and tools used for macroeconomic projections within the European System of Central Banks (ESCB). Each type of model has its own strengths and weaknesses and can help answer different questions. The models should therefore be seen as complementary rather than mutually exclusive. The report also addresses the challenges to macroeconomic projections posed by data quality, including revisions and missing data, and describes the methods implemented to mitigate their effects. The report identifies "quick wins" to improve the projection process by enhancing the transparency and comparability of results through standardised reporting frameworks and better measurement of the judgement integrated in forecasts. The findings highlight the fundamental role of macroeconomic models in underpinning the ESCB's projection exercises and ensuring that the Governing Council's assessments and deliberations rest on coherent, granular and credible analysis of both demand-side and supply-side dynamics.
ECB Occasional Paper Series No. 381