Unhappy with 23 years of uninterrupted economic growth, the Reserve Bank has conducted a review which is likely to recommend taking humans out of their forecasting and replacing them with equations. “Models”, they call it, but it’s equations nonetheless. That’s the message in an AFR article this morning which says that only a few senior officials have seen the report but that it has “raised concerns that Reserve Bank forecasters put too much store in ‘gut feel’ judgments over hard models”. I have to declare an interest here. I consider myself a behavioural economics and finance guy. So, the idea that the RBA stops ... (full story)