As for the individual design of a central bank’s forecast model, it may differ with respect to variable coverage, econometric rigour and the economic theory it incorporates. Basically, however, macroeconomic variables can be predicted in two different ways: structural macroeconometric models, which include traditional multi-equation models and DSGE models, and short-term forecast models, usually based on time-series analysis.
As financial markets became more integrated because of technological developments and financial innovations, in the 1980s and 1990s central banks cooperated largely on development and introduction of international standards for prudential regulation and coordinated financial sector supervision.