Prof. Dr. Christian Conrad, Prof. Dr. Zeno EndersThe limits of the ECB’s inflation projections

Christian Conrad and Zeno Enders recently published a SUERF Policy Brief on “The limits of the ECB’s inflation projections,” arguing that the ECB's inflation projections are uninformative for forecast horizons of more than one year (based on an earlier working paper). Isabel Schnabel, member of the Executive Board of the ECB, mentioned a chart from this Policy Brief in a recent speech (slide 5) at the Bank of Estonia. She used it to conclude that “inflation projections from the forecasting community, including the ECB, have, on average, had little explanatory power for realized inflation over horizons beyond the very short term.” 

In his Central Banks newsletter, Chris Giles from the Financial Times used the same chart to discuss this issue further.