Combinations of forecasts might then outperform forecasts from individual models. 11  To summarize: There are good reasons why monetary policy pursues fullinformation strategies and “looks at everything” in terms of a broad set of information from data and models. The recent sizable literature on robust policies in various model environments also emphasises the merits of model combination and averaging.
12 Therefore, selecting a single model for monetary policy may be inappropriate, since conditioning monetary policy decisions on one model ignores the role of model uncertainty. It also disregards the favourable empirical results from the forecast combination literature, and thus leaves aside potentially important information.