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...

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