The importance of modeling macroeconomic variables has become all the more critical because macroeconomic policy formulation needs to anchor its functional role in developing a full understanding of the economy as well as influencing domestic policy formulation in a logical framework.
Let me explain what is modeling and why it is important:  6  BIS central bankers’ speeches  It is trying to study and analyse different phenomena. For this – you have to quantify the phenomenon so as to be able to relate to them. For example, how much space does a box contain?