Estimating the effects of alternative policy actions is one of the principal uses of macroeconometric models. At the simplest level, dynamic multipliers or ready-reckoners describe the effects over time of a change in a single exogenous variable used as a policy instrument. The effects of a package of such changes may be estimated as the difference between two solution paths, one a control solution or base run over some historical or forecast period, and the second a perturbed solution, incorporating the policy changes, over the same period. To choose policy optimally, the outcomes of each possible package may be evaluated according to some objective function, and the best one selected: optimal control techniques provide a systematic solution to this problem. Contemporary economic policy debate, however, is not limited to questions of the appropriate setting of established macroeconomic policy instruments, but ranges much more widely. New taxes, new expenditure programmes, new uses of existing instruments, new institutional arrangements, all feature in the discussion. Econometric models continue to be used to provide a fully elaborated, internally consistent, quantitative assessment of the macroeconomic outcome, but now the basic specification of the model must be augmented and adapted to accommodate the new policy possibilities. Where these have little or no historical precedent, various prior assumptions and off-model calculations are required before the model can deliver a description of the macroeconomic consequences. In this paper we consider a number of important issues in policy analysis of this kind, illustrating them with particular reference to model-based simulations of Special Employment Measures (SEMs).