SMBC desribes macroeconomic forecasting
Saturday Morning Breakfast Cereal is so so good. And this cartoon is golden.
Reminds me clearly on the description of economics given here – and why the determination to “make predictions” is a bit dodge. I see Barry Ritholz is also chatting on these things, I will be posting about that at some point!
And via the above post, I see that I compared economic forecasting to Tarot Card reading in 2009. I have now moved on to comparing devices of economic communication to tarot card reading. Obviously, I need to find more occult devices to improve my forecasting methods!
Note: This is neither a criticism of broad economics, or of the specific area of economic forecasting (seen as a way of synthesizing and communicating information). See how I view method in economics here.
Love it. The obsession with forecasting is understandable, but only as an expectations setting/planning device. I had the request today to forecast the current and house prices. A ready supply of eye-of-newt apparently would have helped…
As I also work in forecasting, I prefer to call forecasting helping to conceptualise risks – and view it as a way to use disparate information to aid in building an understanding of risks to aid planning. The numbers are meaningless without a story and a clear explanation that it is both conditional and not necessarily “objective truth”.
I get worried that people think we can just use data, and forecasting models as a definite way to find “truth” – the problems of induction aye!
The question isn’t, are economists forecasts right all the time, rather it is are economists forecasts better than other people’s forecasts.
Indeed – and even in that context, what do we really mean by better! Good fun 🙂