It must be possible, for example, to understand the driving forces behind the forecasts – why does the forecast look the way it does? How is the forecast affected by changes in assumptions regarding, for instance, demand abroad or the oil price? The central bank also needs a forecasting apparatus that can effectively investigate the consequences of an alternative monetary policy. For the Riksbank, which publishes it own interest rate path, this is extremely important. To put it more technically, the central bank must use so-called structural models to assess the consequences of various policy rate paths, while other forecasts can mainly be produced with the help of statistical models alone. Normally, there  3  Uncertainty and the revisions of GDP figures and other data make forecasting more difficult and also make it more difficult to evaluate the forecasts. BIS Review 29/2009  5  are good reasons for believing that structural models provide poorer forecasts than statistical models. However, the Riksbank's main structural model, Ramses, has very good forecasting properties. 4 When making historical comparisons between the forecasts of central banks and those of other analysts, we also face a number of other difficulties. The first is that it is not certain that the central bank's forecasts are based on what the bank really believes is the best forecast of the policy rate and other variables.
The International Labour Organization (ILO) estimates that the said ratio will increase to 36 percent in the EU-15 by the year 2020. However, it is expected to be only 16 percent in Turkey by that time. According to another study by the United Nations, the EU would need an average of 6.1 million immigrants a year from 2015 to 2040 to maintain a ratio of three working-age adults for each retiree20. This I believe clearly implies a substantial contribution of Turkey to the EU on the demographic front. On the other hand, when it comes to labour force participation rate in the income per capita equation, Turkey lags behind the EU. One of the reasons of Turkey’s lagging behind is the low female participation rate in the labour force. Although the female participation rate in banking, legal and medical sectors are among the highest in Europe, the very low participation in rural areas cause the overall female participation rate to remain quite low. Another reason of low participation rates based on official figures is the high share of the unregistered economy. With the ongoing reform process and their expected effects on the structure of the labour market, the share of the unregistered economy would decrease and then the female participation rate would increase. This will imply further increase in the labour force participation rate in the Turkish labour market in the near future. Moving on to the employment side of the equation, I will mention some other important points regarding the Turkish labour market.