Sunday, March 25, 2012

Would You Buy a Used Car From This Man?

In the FT an opinion writer states:

Economic forecasters divide into two groups. There are those who cannot know the future but think they can – and then there are those who recognize their inability to know the future. Major shifts in the economy are rarely forecast and often not fully recognized until they have been under way for some time. So judgments about the US economy have to be tentative. 
Now I read his paper which he and a west coast academic are circulating and it is one of those if and if and if documents with models which would not pass muster in any good engineering school, but read the words.  The conclusion, no forecaster ever has a good forecast. Yet then he asks us to believe his recommendation of what will make the future better ... is that not a forecast, and has he not already denied any valid forecast, thus why should we believe him now.

That is the problem with academics, especially economists, the write all too often as if they understand reality and then in the next breath ask us to suspend it.