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.

  • Shamubeel Eaqub

    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…

    • http://tvhe.co.nz/ Matt Nolan

      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!

  • Paul Walker

    The question isn’t, are economists forecasts right all the time, rather it is are economists forecasts better than other people’s forecasts.

    • http://tvhe.co.nz/ Matt Nolan

      Indeed – and even in that context, what do we really mean by better! Good fun :)