Policy decisions are made now for a time that has not yet arrived. Implicit and explicit forecasts, based on theorised relationships calibrated on past observations, are the tools policymakers use to inform these decisions.

However, forecasts of the future are almost certainly going to be wrong, because the future is seldom exactly like the past. Policy decisions made on the wrong information could therefore also be wrong. Even then, some decisions are more wrong than others, some mistakes have more important implications, and some decisions are more difficult to come back from than others...

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as articles from our international business news partners; ProfileData financial data; and digital access to the Sunday Times and Sunday Times Daily.

Already subscribed? Simply sign in below.

Questions or problems? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now