CNB Research Seminar "Risks and Uncertainty in Monetary Policy"

Prague, 26 May 2026

Domenico Giannone  (Johns Hopkins University)

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Domenico Giannone is Bloomberg Distinguished Professor of Economics and Statistics at Johns Hopkins University. His main fields of research are macroeconometrics and forecasting, with focus on business cycles, monetary policy, macro-finance and risk, and high-dimensional data. He holds a Ph.D. in Economics and Statistics from the Université libre de Bruxelles and a B.A. in Statistics and Economics from Università La Sapienza in Rome. Before joining Johns Hopkins he was: Assistant Director at the International Monetary Fund, Senior Principal Economist at Amazon, Assistant Vice President at the Federal Reserve Bank of New York, Co-founder and Director of Nowcasting Economics Ltd., Professor of Economics at the Université libre de Bruxelles,  and Economist at the European Central Bank.

Risks and Uncertainty in Monetary Policy (abstract)

Central banks have developed two traditions for monitoring and communicating macroeconomic risk: scenario analysis, a regular feature of staff outlooks since the mid-1990s, and distributional forecasting, practiced since the 1950s. The two approaches are complementary but methodologically separate: scenarios provide rich narratives without probabilities, while predictive distributions provide probabilities without economic interpretation. Treating baseline forecasts and scenarios as conditional predictive densities, and statistical models as providers of a reference predictive distribution, places both approaches within a common framework and clarifies their respective roles. The Scenario Synthesis assigns weights to scenarios consistent with the reference distribution, offering a practical tool for risk assessment and policy deliberation under deep uncertainty.