the interest rate path that is supposed to achieve the central bank’s objectives best under certain model- and judgment-based assumptions concerning the functioning of the economy. The OIR approach necessitates the commitment of the decision-making body to this conditional forecast.
Given that the Eurosystem staff projections are under the sole responsibility of the staff, and not the Governing Council, the adoption of a OIR forecast is no viable option for the Eurosystem. Moreover, although the OIR has the appealing property of being fully consistent with the central bank’s targets and other inputs there are several problems with this approach.