Cartoon: Economics
Ht Big Picture
To be fair, economics is a wide ranging social science and we can’t criticise some parts of the discipline on the basis of poor forecasts. Furthermore, even in the realm of economic forecasting, the goal is to paint out risks given limited data and an imperfect knowledge of the complex world around us – so judging the discipline on ex-post outcomes makes little sense (we have discussed the range of issues constantly).
However, in so far as sometimes economists come out and discuss their expectations like they are true fortune tellers, this cartoon has some weight 😉
To be fair, why is it assumed that the job of economics is to predict the future to three significant figures — as if economics was some arithmetical sub-branch of necromancy?
Especially since it can’t be done?
@Peter Cresswell
Indeed.
Well that was no fun. To quote Monty Python, “I was hoping for a good argument.” 🙂
@Peter Cresswell
It is hard for me to argue with something I completely agree with 😀
I’d usually try, but I just can’t see how to at the moment.
Guess I’ll just go back to ringing the psychic hotline for my economic predictions.
@Michael
I’m not sure they will be more accurate persee …
I think the point is that economics is there to describe and discuss, and paint risks. The data is too incomplete, and our understanding of the functioning of the economic system too inexact, for us to be predictive in anything more than a probabilistic sense.
There is still value in analysing the issues – definitely. But the value comes from understanding, and preparing for contingencies. Not from being told definitively what the future holds.
Another one I heard was that economists like to make strict rules about how the world works, marketers then do everything they can to screw it all up.