Forecasting in turbulent times

Since  the  beginning  of  this  century,  the  global  economy  has  been  hit  by  a  series  of unforeseen shocks, including the Global Financial Crisis, the euroarea’s sovereign debt crisis, and, most recently, the global inflation surge. To motivate this special issue, we provide  a  brief  overview  of  recent  methods  that  have  been  proposed  to  improve  the abilityof forecast models to predictshocks and to capture their effects once they have occurred.  We  also  propose  a  method  that  may  allow  central  banks  to  respond  more quickly to the kind of inflationary surge that occurred from2020 to 2022 so that those banks would not have misdiagnosed the surge as a temporary phenomenon.