Thursday, 23 April 2020

"Only the superstitious think that profitable forecasts about human action are easily obtainable. Economics itself says that forecasts, like many other desirable things, are scarce.." #QotD


"
Economics is the science of the postmagical age. Far from being unscientific hoobla-hoo, economics is deeply antimagical. It keeps telling us that we cannot do it, that magic will not help. Only the superstitious think that profitable forecasts about human action are easily obtainable…. Economics itself says that forecasts, like many other desirable things, are scarce. It cannot be easy to know which great empire will fall or when the market will turn…. Some economists allow themselves to be paid cash money to answer such questions, but they know they cannot. Their very science says so."

~ Deirdre McCloskey, from her article 'The Art of Forecasting: From Ancient to Modern Times'
[Hat tip Cafe Hayek]
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1 comment:

  1. The Bank of England issues a monthly summary of Economic forecasts. In 2012 I had to take all the forecasts of 2010 and 2011 for GDP growth in those years and compare them with the actual out turn. Results:
    * 6 months out, the consensus was more that 50% out.
    * Accuracy at 12 and 3 months out was also woeful.
    * Even in the months after CY11 and CY12 finished, some forecasters could not correctly forecast the past.

    Crystal balls.

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