One major factor was the economic policy response to the crisis. Fiscal measures to mitigate the effects of the pandemic, expansionary monetary policy, and greater regulatory flexibility – all of these are extraordinary factors that are not covered by the models. [15] Models, including mathematical models, have their uses.
However, especially in highly uncertain times of economic upheaval, model results must be interpreted with caution. Additional shocks followed. Geopolitical tensions are impacting future global economic relations; Russia’s invasion of Ukraine has necessitated a paradigm shift in terms of security and energy policy; addressing climate change is an urgent concern. Scenarios that were once considered “adverse” have now become a reality.