For example, simulations of an econometric model may imply that policy A is likely to produce better outcomes than policy B; but if expert judgment suggests that the model’s  7  More realistically, the plan might include contingent elements; for example, it might involve keeping the funds rate low unless inflation begins to rise, in which case rates would be allowed to rise as well.
Stipulating a policy plan, at least in general terms, is essential in the context of forecast-based policies, as specifying only the current value of the policy rate does not provide enough information to construct a forecast.