12  For example, Brock, Durlauf and West (2003, 2006) propose a model averaging approach that derives optimal policy given a policy maker’s preferences – for example, a loss function – and given a variety of possibly relevant models affecting the central bank’s target values. Apart from forecast averaging, a multiple model approach helps to address other issues where model uncertainty matters.
For example, a policymaker may be interested in policies whose effects are relatively insensitive to which model is the correct one. 13  See Issing (2004), p. 725. 4  BIS Review 36/2006  The regular staff projections are carried out as a collaboration between the ECB and the national central banks of the euro area.