Are centralbanks’projectionsmeaningful

Centralbanks’projections–i.e.forecastsconditionalonagiveninterestratepath–are often criticizedonthegroundsthattheirassumptionsareinconsistentwiththe existenceofauniqueequilibriuminmanyforward-lookingmodels.Thepresentpaper describesthreealternativeapproachestoconstructingprojectionsthatarenotsubject to theabovecriticism,usingtheNewKeynesianmodelasareferenceframework.The threeapproachesareshowntogeneratedifferentprojectionsforinflationandoutput, even thoughtheyimplyanidenticalpathfortheinterestrate.Thelatterresultcallsinto questionthemeaningandusefulnessofsuchprojections