To change or not to change The evolution of forecasting models at the Bank of England

Aurélien Goutsmedt (1, 2) , Francesco Sergi (3, 4) , Béatrice Cherrier (5, 6, 7) , François Claveau (8, 9) , Clément Fontan (10, 1) , Juan Acosta (11)

1 UCL - Université Catholique de Louvain = Catholic University of Louvain
2 FNRS - Fonds National de la Recherche Scientifique [Bruxelles]
3 UPE - Université Paris-Est
4 LIPHA - Laboratoire Interdisciplinaire d'étude du Politique Hannah Arendt Paris-Est
5 ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique
6 X - École polytechnique
7 CREST - Centre de Recherche en Économie et Statistique
8 UdeS - Université de Sherbrooke
9 CIRST - Centre interuniversitaire de recherche sur la science et la technologie
10 Université Saint-Louis - Bruxelles
11 Univalle - Universidad del Valle [Cali]

Why do policymakers and economists within a policymaking institution choose to throw away a model and to develop an alternative one? Why do they choose to stick to an existing model? This article contributes to the literature on the history and philosophy of modelling by answering these questions. It delves into the dynamics of persistence, change, and building practices of macroeconomic modelling, using the case of forecasting models at the Bank of England (1974-2014). Based on archives and interviews, we document the multiple factors at play in model building and model change. We identify three sets of factors: the agency of modellers, institutional factors, and the material factor. Our investigation shows the diversity of explanations behind the decision to change a model: each time, model replacement resulted from a different combination of the three types of factors.

Mots clés: Central bank; Forecasting; Macroeconomic modeling; Bank of England; Models

Domaines: Economies et finances

Aurélien Goutsmedt, Francesco Sergi, Béatrice Cherrier, François Claveau, Clément Fontan, et al.. To change or not to change The evolution of forecasting models at the Bank of England. Journal of Economic Methodology, In press, ⟨10.1080/1350178X.2024.2303113⟩. ⟨hal-04181871v2⟩