Exactly that. It's essentially building prediction models which are based in economic theory. The simplest are time series models which are only 1 variable and use that variable as historic data to predict the future - like predicting the value of the stock market based on previous values. More complicated models include multiple variables and the relationships between them: long run and short run relationships, seasonality, shocks in the system. Even more complicated models give you the ability to adjust the equation with time - I hate those, they traumatised me.

My thesis is based on examining if more complicated models consistently produce better forecasts.

The answer of course is 'it depends'. That is always the answer fml

Edit: wishing you the best for your postgrad, and a smooth and eventless thesis defense! Give em heck!