The Bank of Canada published background material on its most ambitious attempt to use math and computing power to create a schematic of the economy. Governor Tiff Macklem parked older models last month. Prima’s official debut will be at the central bank’s next interest rate decision on Oct. 28. (The Logic)

Talking point: Prima was born out of central banks’ failure to anticipate runaway inflation after the COVID-19 pandemic. Central bankers and their models were conditioned to see inflation as a demand-driven phenomenon, which meant they were blind to supply shocks caused by black swan events such as health lockdowns and raging wildfires. Prima isn’t a crystal ball; it doesn’t foresee pandemics and wars. But testing suggests the new model’s ability to process granular sectoral data might have detected that inflationary pressures were gathering sooner than previous methods. “Prima does not eliminate uncertainty or the need for judgment,” the central bank said.

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