Only a handful of central banks use more advanced model elements such as heterogeneous agents and non-linearities in their main forecast models, data from the Economics Benchmarks 2024 shows.
Among 32 central banks that supplied data on the features of their main models, 12.5% include some form of heterogeneity, and 15.6% include non-linearities. Far more common are multiple channels of monetary transmission (87.5%) and inflation expectations (84.4%).
Heterogeneity could add realism to models by
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