BoE’s Weale warns MPC may have underestimated oil price impact
Use of a t distribution might yield better results, MPC member says
The Bank of England's (BoE) monetary policy committee (MPC) may have underestimated the extent to which last year's oil price shock will weigh on inflation, MPC member Martin Weale warned on May 21.
Weale told a conference of the Association of European Conjuncture Institutes the problem seemed to stem from over-reliance on the normal distribution. Based on such a distribution an event of the magnitude of the oil shock should happen roughly once every 400 years, which seems implausible. But
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