What methods do economic modellers use?
From an introductory article published by the International Monetary Fund (IMF):
An economic model is a simplified description of reality, designed to yield hypotheses about economic behavior that can be tested. [...]
Economic models generally consist of a set of mathematical equations that describe a theory of economic behavior. The aim of model builders is to include enough equations to provide useful clues about how rational agents behave or how an economy works.
How do governments choose economic modellers?
People with expertise in economic modelling may be employed directly by a government institution, such as the finance ministry or central bank. Governments may also consult external experts, for example in:
In the case of Australia, the government department known as the Treasury reformed its economic modelling strategy in 2016:
In response to a review of its macroeconomic forecasting methodology, Treasury undertook to develop a wider range of alternative techniques to forecast the economy and to convene an external panel of experts to provide advice on those alternatives.
The expert panel provides advice on technical macroeconomic and forecasting issues. The members are academics and other macroeconomic experts with specialist knowledge in macroeconomic modelling.
Treasury is also making a determined effort to build its macroeconomic and modelling capacity recruiting staff with extensive macroeconomic and modelling experience.