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Broadbent: Signal versus noise
We are all aware that the future is unpredictable. When it comes to gauging the economy, however, it’s not just the future that’s uncertain: so is the present. For all the time and effort put into its forecasts the MPC also spends a great deal of it getting to understand the here and now. This isn’t straightforward. For one thing, it’s not always possible to determine precisely what’s causing what – to trace the economy we observe back to the underlying forces that are driving it. Is output growth being moved around by demand or supply? Ditto employment? To take an example of particular relevance right ... (full story)