The South Africa Reserve Bank and almost all of us here at this venue make use of various tools in the form of structural models that help us analyse and forecast the future of the economy. The fact that forecasts keep changing in such a dramatic way does not necessarily mean that we are bad modellers or forecasters.
But we must be aware of the limitations of models, and the major challenges that face forecasters in this ever-changing economic environment. 2. The use and challenge for models  At the heart of any economic model is a perception of how the economy works. This leads to the representation of the structural economic relationships in the economy.