Forensic scrutiny of the decisions taken by policymakers and the analysis that underpins them is an essential component of a healthy public policy regime, particularly one where power has been delegated from elected politicians to unelected officials. One of our chief concerns with the evolving macroprudential policy regime is that there is so little scrutiny of what is and what is not being said or done by policymakers. We [...]
About Richard Barwell (Edit profile)Head of Macro Research at BNP Paribas Asset Management. Richard is responsible for promoting collaboration between investment teams and formulating alpha-generating investment views across all asset classes. Richard has worked at Royal Bank of Scotland (Markets & International Banking and Global Banking & Markets) and the Bank of England as a Senior Economist. Richard has 16 years of investment experience.
No model and no loss function is not a recipe for good macroprudential policy Author: Richard Barwell Published: 27 September 2021 There is a problem with macroprudential policy. The two core building blocks of an economic policy regime – a model of the system and a loss function to guide policy decisions – are missing[i]. Without a reliable model of the system, policymakers cannot forecast with any [...]