The second quality I have in mind refers specifically to the model’s role in forecasting and policy analysis. A model must have a good track record, in order to serve as a reliable guide to the policymaker. I am not asking for spot-on point forecasts or estimates but, at a minimum, a macro model must be able to provide policymakers with a good feel for the directional effects of various policy options. Thirdly, the workings of the model must be transparent. Ideally, the structure of the model should correspond to a flowchart of the linkages within the economy. Fed Governor Laurence Meyer has said in a recent speech3 that model-based forecasting needs to “start with a paradigm and end with a story”. 2 3  Non-Accelerating Inflation Rate of Unemployment. To the Stern Graduate School of Business, New York University: “Start with a Paradigm, End with a Story: The Value of Model-Based Forecasting and Policy Analysis”. BIS Review 9/2000  2  Ultimately, when policymakers want to introduce policy changes, they want to know through what channels the effect of this policy will flow and how agents will react to this policy. In other words, policymakers want to know the story going on behind each policy reaction and not just be buried under masses of model output. Fourth, macro modelling should adopt a pluralistic approach. Policymakers are like consumers while macro modellers are the producers. As the well-known econometrician Clive Granger4 said, “it is worth remembering that consumers usually prefer having a choice.
Without wishing to preempt what you shall be taught, I wish to only explain that good corporate governance is one of our strategic objectives and its inclusion as a strategic objective reflects our commitment to align our operations with world best practices, consistent with our vision ‘to be a world class central bank’. The module on Risk Management was included to provide you with knowledge that will enable you appreciate why the Bank has introduced the Risk Management Department. Director - Risk Management will do a presentation during which he will explain what risk management is all about and its relevance to Bank of Zambia. Finally, the inclusion of a module on the Core Functions of the Bank of Zambia is designed to provide you with knowledge on the operations for which the Bank was established. This is important for a number of reasons. First, we want to have a cadre of enlightened and well informed managers who will portray a positive image of the Bank and reflect our standing as a world-class Bank. As managers, you have to have a reasonable understanding of how the Bank’s core activities departments operate and are organised. Second, as managers, especially as “world-class” employees, you are also expected, by the public, to  BIS Review 125/2006  1  have a reasonable grasp of issues pertaining to core operations of the Bank.