Every economic model, no matter how detailed or how well designed, conceptually and empirically, is a vastly simplified representation of the world that we experience with all its intricacies on a day-to-day basis. Policymakers have needed to reach beyond models to broader - though less mathematically precise - hypotheses about how the world works.
However, exports have gradually gained steam during the present year, reducing the negative impact on the economy. The fact that manufacturing output has been expanding since last May could be a reflection of the external improvement. The second shock has been domestic and more enduring, expressed in a continuous contraction of public investment since the third quarter of 2012 and weak private investment.