In addition, models allow us to check whether our forecasts are consistent. For example, does the path for output and employment imply a plausible path for productivity? And do they imply patterns of economic behaviour that are broadly in line with historical experience?
A recent instance is the decline in wage growth over recent years, which has been larger than implied by the historical relationship with the unemployment rate. Of course, we may be justified from time to time to think that history is likely to be a poor guide, but it’s worth being explicit about any such deviations.