But the structural change can be incorporated into a model from which uncertainty is derived. However, model-based projection ranges also have two major disadvantages. First, the effects of model uncertainty are ignored. Second, information not contained in the model variables, which is typically incorporated into the forecast by means of subjective adjustments by the forecaster, is ignored.
How to best represent forecast uncertainty is still the subject of intensive discussions in the Eurosystem, and a final decision has yet to be taken. Furthermore, it should be taken into account that forecast uncertainty may vary markedly over time, so that neither past forecast uncertainty nor the forecast uncertainty derived from models is always a good basis for assessing current forecast uncertainty.