How would changing the level of interest rates now affect these outcomes? These questions are difficult to answer with any degree of precision. The inaccuracy of economic forecasts is well documented and often much maligned.
As Glenn Stevens noted when speaking on forecasting a few years ago, ‘one big difference in economics is that some decisions based on forecasts may alter the outcomes – as in the case of economic policy decisions, or spending decisions by businesses and households’. [9] He went on to observe that this is one advantage weather forecasters have over the economics profession.