Over time, however, as new data releases may lead to changes in perceptions of the nature of shocks, individual behaviour and policy can be readjusted accordingly. These results highlight the importance of detailed analyses to understand the determinants of observed productivity developments, and to gauge how long a productivity slowdown would last.
For example, were a model to predict a surge in inflation, a decision for preemptive hikes before the surge is evident in actual data would need to be balanced against the considerable cost of the model being wrong.