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ECB's Coeure Warns Against Fake Data

Fake statistics are equally threatening to the euro area economy as fake news is to politics, European Central Bank Executive Board member Benoit Coeure said Friday.

"Just as there are concerns about "fake news" dominating social media, there is a risk of "fake", or at least poor quality, statistics driving out better quality ones in public discourse," Coeure said in a speech in Paris.

"And just as false reports may quickly go viral, reliance on internet search data in the assessment of the economic situation may become self-fulfilling."

Further, the policymaker said measures by economic agents could become less anchored to actual activity and more prone to manias and panics, with obvious implications for economic and financial stability.

Such a scenario poses two challenges to policymakers, he pointed out. Firstly, they have to meet the demand for more individually tailored information. And secondly, public perceptions of policy targets may differ from the abstract definitions employed.

"Over time, engagement with the public may result in changes to definitions, and even in the conduct of policy," Coeure said.

He also warned that new technological advances could lead to "a new "monkey in the mirror" mimetic loop" through big data.

"That is, we may one day be tempted to draft our monetary policy statements and speeches in the light of how they will be comprehended and interpreted by artificial intelligence algorithms," he said.

The consequences of such behavior by central banks remains to be understood, Coeure added.

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