guy debelle : remarks - the walkley business journalism award remarks by mr guy debelle, deputy governor of the reserve bank of australia, at the walkley business journalism award, the walkley foundation, sydney, 22 october 2018. * * * thank you very much for the invitation to be here. the financial media is very important to the reserve bank, playing a critical role in helping us communicate our message to the public. today i am going to talk about the challenges that uncertainty causes journalists as well as policymakers. i will draw on charles manski, nate silver and philip tetlock and repeat the warning of the first of these : ‘ beware the lure of incredible certitude ’. 1 what does manski mean? he means try to avoid presenting point predictions and estimates without conveying any sense of the uncertainty around them. this is hard because as manski notes, ‘ the public, impatient for solutions to its pressing concerns, rewards those who offer simple analyses leading to unequivocal policy recommendations ’. should we be giving the people what they want? can they handle the truth? or in this case, can they handle the fact that we don ’ t really know the whole truth? to channel mulder and scully, the truth is out there, but its whereabouts are unknown. we are always making decisions under uncertainty. uncertainty is unavoidable. sometimes the uncertainty isn ’ t that important and we can ignore it. but a lot of the time, it is important and we can ’ t ignore it. so what do we do? we estimate. as philip tetlock said in his great book superforecasting, ‘ estimating is what you do when you do not know ’. given we are in a world of probabilistic statements, how do we assess them? how do we hold those who make these statements to account? probabilistic statements should be falsifiable and they should be verifiable. they need a time frame and they need some numbers. they should avoid phrases like ‘ x has a significant chance of happening ’. or ‘ there is a possibility of x happening ’. significant and possible can mean anything. pin people down ; get them to commit! if instead we have a statement such as ‘ x has a one in three chance of happening in the next two years ’, we can work out that it is less likely to occur than something that has a 50 / 50 chance of

oil prices flow through fairly directly to petrol prices, and thus generate short - term fluctuations in cpi inflation, both here and abroad. the broader implications depend on how strong global demand might be, how quickly production is restored, and on how easily replacement sources https : / / www. rba. gov. au / speeches / 2019 / sp - so - 2019 - 10 - 04. html 4 / 13 10 / 4 / 2019 lumps, bumps and waves | speeches | rba of supply can ramp up. in the case of the recent attacks, it seems that saudi supply has been mostly restored already. so the effect on prices has been small and transient. but it is easy to see how these kinds of events can have more pervasive effects. surfing the waves … now we come to the big waves, the secular trends or transitions to new states of the world. these might be easy to identify and name, but they are often hard to anticipate, and their effects can be pervasive and hard to disentangle. it's also easy to be struck by just how many ‘ waves ’ there are, and how diverse their causes can be. non - economic waves many of these waves come from causes that are in some sense outside the economic system. demographic forces are perhaps the best - known of these. because these forces play out over long periods, they are usually thought of as being outside the system, though of course policy can affect demography to some extent. the rise of china and its wave of urbanisation is a good example where policy and underlying demography have both mattered. with that urbanisation has come a lot of housing and infrastructure construction. this in turn has increased demand for steel and related commodity prices, with profound effects on the world economy, especially australia. perhaps the best example here, though, is the demographic shift that is the ageing of the population. this is something the bank has talked about publicly in recent years, and it has been a priority of the japanese presidency this year in the g20. today i'd like to highlight the implications of population ageing for labour force participation. it is often assumed that population ageing will reduce participation, because more people will be elderly and retired. but in australia the opposite has occurred. this is also true for other advanced economies, with the united states being the exception. although there are more older people, and older people do tend to participate less in the labour force than people in their