Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/210214
Authors: 
Alstadheim, Ragna
Bache, Ida Wolden
Holmsen, Amund
Maih, Junior
Røisland, Øistein
Year of Publication: 
2010
Series/Report no.: 
Staff Memo No. 11/2010
Publisher: 
Norges Bank, Oslo
Abstract: 
Norges Bank is one of few central banks publishing an interest rate fore- cast. This paper discusses how we derive and communicate the interest rate forecast. To produce the forecasts, the Bank uses a medium-sized small open economy DSGE model - NEMO. Judgments and information from other sources are added through conditional forecasting. The interest rate path is derived by minimizing a loss function representing the monetary policy mandate and the Board s policy preferences. Since optimal policy is vulnerable to model uncertainty, some weight is placed on simple interest rate rules. A weight on the deviation of the interest rate from the level implied by a simple rule is included in the loss function.
Persistent Identifier of the first edition: 
ISBN: 
978-82-7553-574-8
Creative Commons License: 
http://creativecommons.org/licenses/by-nc-nd/4.0/deed.no
Document Type: 
Research Report
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