10  •  Owing to model uncertainty, using the correct conditional expectation for forecasting is unrealistic, and, in reality, departures from the correct model may be expected to be the rule rather than the exception. •  If structural breaks occur, forecasts from individual models may be affected differently, possibly on account of differing degrees of misspecification.
Combinations of forecasts might then outperform forecasts from individual models. 11  To summarize: There are good reasons why monetary policy pursues fullinformation strategies and “looks at everything” in terms of a broad set of information from data and models. The recent sizable literature on robust policies in various model environments also emphasises the merits of model combination and averaging.