Introduction

Traditional inflation metrics often rely on backward-looking data that can lag real-time economic conditions. To make effective forward-looking policy decisions, central banks and financial institutions are increasingly turning to high-frequency, qualitative data gathered directly from businesses. The Decision Maker Panel (DMP) framework, pioneered by the Bank of England, represents a paradigm shift in economic surveillance, providing valuable, timely insights into firms' expectations for prices, wages, and investment that complement conventional economic models and official statistics. This course offers a practical application of this cutting-edge surveillance methodology. Participants will gain a comprehensive understanding of how to design and implement a DMP-style survey, analyze the rich microdata it provides, and integrate these insights into inflation forecasting and monetary policy formulation. By drawing on the extensive experience of the Bank of England and a case study from Bank Negara Malaysia, this program provides a unique, practical perspective on a powerful tool for navigating an uncertain economic landscape.

Duration:

10 days

Target Audience:

• Central bank economists and researchers
• Financial sector analysts and strategists
• Government economic policymakers
• Academics in economics and finance
• Financial journalists
• Macroeconomic forecasters
• Data scientists in financial institutions
• Treasury and finance officers
• Economic development planners
• Risk managers in the banking sector

Objectives:

• Master the methodology of the Decision Maker Panel (DMP) framework.
• Design and implement a business survey for real-time inflation surveillance.
• Analyze high-frequency, qualitative data from firms on prices and wages.
• Integrate DMP data into traditional macroeconomic models and forecasts.
• Understand the insights the DMP provides on business expectations and uncertainty.
• Differentiate between firm-level and aggregate inflation dynamics.
• Draw lessons from the Bank of England's extensive experience with the DMP.
• Apply a case study from Bank Negara Malaysia to a different economic context.
• Use DMP data to inform monetary policy decisions.
• Communicate forward-looking inflation risks to policymakers and the public.

Module 1: The Rationale for Advanced Surveillance

• The limitations of traditional inflation data
• The need for high-frequency, forward-looking indicators
• The role of business surveys in economic analysis
• Understanding inflation expectations and their impact on policy
• Bridging the gap between official statistics and economic reality

Module 2: The Bank of England’s DMP: Methodology

• The history and structure of the Bank of England's DMP
• Survey design: crafting effective questions for firms
• The panel-based approach and its benefits
• Representativeness and data weighting
• Maintaining the integrity and confidentiality of the survey

Module 3: Core DMP Survey Questions

• Asking about past and expected price growth
• Measuring wage growth expectations
• Gauging investment and employment intentions
• Capturing uncertainty through probability distributions
• The use of special questions on topical issues

Module 4: Analyzing DMP Data

• Aggregating firm-level data for macroeconomic analysis
• Using microdata to understand heterogeneity across firms
• Dissecting inflation expectations by firm size and sector
• Visualizing key trends and changes over time
• Statistical methods for data cleaning and validation

Module 5: DMP Data and Inflation Forecasting

• Incorporating DMP insights into forecast models
• How DMP data can improve short-term inflation predictions
• Using business expectations to forecast wage-price dynamics
• Enhancing the forecast narrative with qualitative information
• The role of the DMP in a central bank's forecast round

Module 6: A Case Study: Bank Negara Malaysia

• Overview of Bank Negara Malaysia's inflation surveillance framework
• The use of qualitative surveys and direct engagement with businesses
• How their approach complements conventional inflation metrics
• Comparing the Malaysian and UK frameworks
• Lessons learned from adapting a surveillance model to a different economy

Module 7: Inflation Expectations and Their Measurement

• The importance of anchored inflation expectations
• Differentiating between household and business expectations
• Using the DMP to gauge long-term inflation beliefs
• The impact of communication on public expectations
• How expectations can become self-fulfilling prophecies

Module 8: The Role of Uncertainty

• The measurement of uncertainty in economic surveys
• How uncertainty affects business decisions on prices and wages
• Using DMP data to assess the impact of economic shocks
• The link between uncertainty and monetary policy effectiveness
• Communicating policy in an uncertain environment

Module 9: The Digital Tools for Surveillance

• Designing an online survey platform for a DMP framework
• Data security and management for sensitive business data
• Automation in data collection and aggregation
• Tools for data visualization and dashboard creation
• Leveraging cloud services for survey administration

Module 10: Building a Modern Surveillance System

• Steps to establish a new DMP-style survey
• Key stakeholders and institutional collaboration
• Overcoming challenges in panel recruitment and retention
• Integrating the system into an existing central bank structure
• The importance of a pilot phase and iterative development

Module 11: Inflation Transmission Mechanisms

• Understanding how shocks propagate through the economy
• The role of supply chains and input costs on prices
• Analyzing the pass-through from wages to prices
• Using DMP data to track transmission channels
• The impact of monetary policy on business behavior

Module 12: Sectoral and Firm-Level Analysis

• Diving deeper into specific industries with DMP data
• Understanding why inflation varies across sectors
• How firm size and competitive landscape affect pricing
• Identifying idiosyncratic shocks versus common trends
• The micro-to-macro linkage in inflation dynamics

Module 13: The Policy-Making Context

• Presenting DMP findings to a monetary policy committee
• How qualitative insights inform quantitative decisions
• The DMP as a tool for "risk management" in policy
• Using DMP data to justify policy actions to the public
• The role of DMP in central bank communication

Module 14: Inflation and Labor Market Dynamics

• The relationship between wages, employment, and inflation
• Using DMP data to forecast labor market pressures
• The role of labor shortages in driving wage growth
• Analyzing firms’ hiring and compensation plans
• The interplay between inflation and unemployment

Module 15: Lessons from the Financial Crisis and Pandemic

• How the DMP captured firm behavior during major shocks
• The evolution of business expectations through crises
• The policy response informed by DMP insights
• Case studies on the impact of Brexit and COVID-19
• The resilience and adaptability of the DMP framework

Module 16: Future Trends and Evolution

• The potential of AI and machine learning in surveillance
• Integrating Big Data with DMP insights
• Expanding the framework to other economic variables
• The role of behavioral economics in survey design
• Global trends in central bank surveillance and data acquisition

Training Approach

This course will be delivered by our skilled trainers who have vast knowledge and experience as expert professionals in the fields. The course is taught in English and through a mix of theory, practical activities, group discussion and case studies. Course manuals and additional training materials will be provided to the participants upon completion of the training.

Tailor-Made Course

This course can also be tailor-made to meet organization requirement. For further inquiries, please contact us on: Email: info@skillsforafrica.org, training@skillsforafrica.org  Tel: +254 702 249 449

Training Venue

The training will be held at our Skills for Africa Training Institute Training Centre. We also offer training for a group at requested location all over the world. The course fee covers the course tuition, training materials, two break refreshments, and buffet lunch.

Visa application, travel expenses, airport transfers, dinners, accommodation, insurance, and other personal expenses are catered by the participant

Certification

Participants will be issued with Skills for Africa Training Institute certificate upon completion of this course.

Airport Pickup and Accommodation

Airport pickup and accommodation is arranged upon request. For booking contact our Training Coordinator through Email: info@skillsforafrica.org, training@skillsforafrica.org  Tel: +254 702 249 449

Terms of Payment: Unless otherwise agreed between the two parties’ payment of the course fee should be done 7 working days before commencement of the training.