Policy evaluation with Sufficient Macro Statistics -a primer

• Authors: Geert Mesters and Régis Barnichon.
• BSE Working Paper: 1474 | January 25
• Keywords: forecasting , impulse responses , optimal policy
• JEL codes: C14, C32, E32, E52, N10
• forecasting
• impulse responses
• optimal policy

Impulse responses and forecasts are central concepts for policy makers. In addition, they are also sufficient statistics to solve many important macroeconomic problems, from policy counterfactuals to policy evaluation, and they offer a promising alternative to the standard structural modeling approach. In this review paper, we discuss and extend recent progress on the use of these sufficient macro statistics for policy evaluation. We illustrate the methods by evaluating the performance of the ECB over 1999-2023.