Expert economists - the appaling record of prediction

Thrugelmir

cogito wrote: »

If you laid a million economists end to end, they'd never reach a conclusion......

Even the IMF disagree internally.

Conrad

cells wrote: »

Your brexit is going to be wonderful posts are as silly as the brexit is going to be horrific. The Truth is we are all arguing about something along the lines of plus/minus 3% over the next decade and maybe plus/minus 5% over the next two decades. Both will be lost in the fog of time.

In the end people will think it completely normal to live in a sovereign nation making it's own decisions, within a very short period, and all this great fuss will be lost in the fog as you say.


Really it's a pretty minor adjustment and business will always cope - just as global business puts their products in our homes without and SM nonsense. 70% of our exports are under WTO provisions, so the additional 30% having a slight adjustment is hardly going to bring the walls down.


Thinking back to when seatbelt law came in, or not smoking in pubs, or even things like the telephone (the terrified warned it would be the end of face to face interaction - seriously) - you got this wail of derision and hysteria, and then soon after it becomes the norm. That's Brexit.

wotsthat

Thrugelmir wrote: »

Even the IMF disagree internally.

I don't understand why economics is the only field where people are surprised to find any disagreement.

There are still arguments about the weight of the Earth - no one dismisses physics because of this or because a calculation will be based on a certain level of assumption or ranges of confidence.

cogito

The earth is in freefall and doesn't have any weight. It has mass.

TrickyTree83

wotsthat wrote: »

I don't understand why economics is the only field where people are surprised to find any disagreement.

There are still arguments about the weight of the Earth - no one dismisses physics because of this or because a calculation will be based on a certain level of assumption or ranges of confidence.

Economics is not a science in the sense that you can follow the scientific method though is it?

You can set up an experiment to measure the speed at which objects with different density fall to the ground and therefore make a prediction about other objects with similar density properties after your tests are complete.

Economists don't run tests in a sandbox environment with control factors, they don't come up with a theory and then test the theory, re-work the theory then test again until they come up with something that is sound to the best of their ability and knowledge. It's just a long line of continuous theory, without tests, and predictions based upon untested theory. It's impossible for them to adhere to the scientific method. It's less of an exact science than sociology, psychology and anthropology. And yet it's the only (to my knowledge) type of science like this that has a Nobel prize. Bizarre.

Edit: In short Economics is as much a science as predicting the outcome of a roulette wheel.

There's a lot of hubris in the area of economics. None of them will openly tell you that it's a flawed science. I'm going to guess that you're aware of the butterfly effect? Well when someone comes up with an idea like the personal computer, or software like Windows or Facebook, it's a complete game changer for economics. Change like this is happening rapidly all around the world and with any number of unforeseen consequences. For example who was to know that MySpace would not succeed in the same way that Facebook did? Or that Netscape Navigator wouldn't become the search engine of choice and Google would become gargantuan and invent things like Android, driver-less cars, a new browser, etc...

I can forgive economists for not being able to predict the future when the future is so complex and fast moving. But I cannot forgive them for speaking out about the ramifications of choices when it's clear they're unable to make those predictions with any reasonable degree of certainty.

wotsthat

TrickyTree83 wrote: »

Economics is not a science in the sense that you can follow the scientific method though is it?

You can set up an experiment to measure the speed at which objects with different density fall to the ground and therefore make a prediction about other objects with similar density properties after your tests are complete.

Economists don't run tests in a sandbox environment with control factors, they don't come up with a theory and then test the theory, re-work the theory then test again until they come up with something that is sound to the best of their ability and knowledge. It's just a long line of continuous theory, without tests, and predictions based upon untested theory. It's impossible for them to adhere to the scientific method. It's less of an exact science than sociology, psychology and anthropology. And yet it's the only (to my knowledge) type of science like this that has a Nobel prize. Bizarre.

Edit: In short Economics is as much a science as predicting the outcome of a roulette wheel.

There's a lot of hubris in the area of economics. None of them will openly tell you that it's a flawed science. I'm going to guess that you're aware of the butterfly effect? Well when someone comes up with an idea like the personal computer, or software like Windows or Facebook, it's a complete game changer for economics. Change like this is happening rapidly all around the world and with any number of unforeseen consequences. For example who was to know that MySpace would not succeed in the same way that Facebook did? Or that Netscape Navigator wouldn't become the search engine of choice and Google would become gargantuan and invent things like Android, driver-less cars, a new browser, etc...

I can forgive economists for not being able to predict the future when the future is so complex and fast moving. But I cannot forgive them for speaking out about the ramifications of choices when it's clear they're unable to make those predictions with any reasonable degree of certainty.

Are you a 'real' scientist? I am and you'll note I didn't call economics a science (rather a field) but that's a snobbery - something doesn't have to be science to have value. There are plenty of examples of economics experiments taking place - some best selling books like Freakonomics refer to these experiments.

I think a skilled economist is good at explaining what happened and why. This skill probably has some application in helping to predict the future to a degree but the role of economist as a prediction machine is quite new.

Everyone makes predictions all of the time. We're humans living in a world of uncertainty and randomness and demand a narrative to help make sense of it all. We even demand football pundits make a prediction about a match where, if we wait 90 short minutes, we'll know the outcome anyway.

I find this thread sweetly ironic.

michaels

cells wrote: »

confirmation bias

the world is a big place you will find someone predicting everything from one to one-thousand so post event you can go back and find someone with the right answer and someone with the wrong answer

Overall the future is bright for the next 20 years however the 20 years after that point is unknown as we may be entering the time of artificial intelligence and things go go very well or very badly once that arrives.

Your brexit is going to be wonderful posts are as silly as the brexit is going to be horrific. The Truth is we are all arguing about something along the lines of plus/minus 3% over the next decade and maybe plus/minus 5% over the next two decades. Both will be lost in the fog of time.

You are writing a book on the UK economy to make money. Do you suggest that we will probably muddle along, with growth between 1 and 5% bar the odd recession and sell about 6 copies (self published) to your family and friends or do you come up with a bold and striking prediction (preferably doom-laden) and make £50k from a Sunday paper serialization and a couple of hundred k from sales. This is especially effective if it fits a picture that can be picked up and run with by one of the political parties.

zagubov

TrickyTree83 wrote: »

Economics is not a science in the sense that you can follow the scientific method though is it?

You can set up an experiment to measure the speed at which objects with different density fall to the ground and therefore make a prediction about other objects with similar density properties after your tests are complete.

Economists don't run tests in a sandbox environment with control factors, they don't come up with a theory and then test the theory, re-work the theory then test again until they come up with something that is sound to the best of their ability and knowledge. It's just a long line of continuous theory, without tests, and predictions based upon untested theory. It's impossible for them to adhere to the scientific method. It's less of an exact science than sociology, psychology and anthropology. And yet it's the only (to my knowledge) type of science like this that has a Nobel prize. Bizarre.

Edit: In short Economics is as much a science as predicting the outcome of a roulette wheel.

unable to make those predictions with any reasonable degree of certainty.

It wasn't one of the original five prize categories. It was made up by the Swedish Central Bank about 70 years later, who pay for it all (and pay the Nobel prize award committee to give it out at the same ceremony as the others).

I regard the subject as ideological mind game rather than quest for objective knowledge..

Chickereeeee

Plus, of course, being aware of a future possible danger can mean you steer away from it.

e.g. If we DO manage to control emissions and avoid changing the climate too much, then there will be plenty of people saying the predictions were wrong……


C

TrickyTree83

wotsthat wrote: »

Are you a 'real' scientist? I am and you'll note I didn't call economics a science (rather a field) but that's a snobbery - something doesn't have to be science to have value. There are plenty of examples of economics experiments taking place - some best selling books like Freakonomics refer to these experiments.

I think a skilled economist is good at explaining what happened and why. This skill probably has some application in helping to predict the future to a degree but the role of economist as a prediction machine is quite new.

Everyone makes predictions all of the time. We're humans living in a world of uncertainty and randomness and demand a narrative to help make sense of it all. We even demand football pundits make a prediction about a match where, if we wait 90 short minutes, we'll know the outcome anyway.

I find this thread sweetly ironic.

I'm not a 'real' scientist no.

I do however code data mining algorithms as part of my job, so it's easy to see how economics can be incredibly wrong when I've seen myself the impact change to one input of say 20 can have on the outcome of a prediction in a relatively simple data mining model.

As a business intelligence developer I can also be equally adept at explaining what happened in business based on historic data. But that's all it is because nothing is changing in the historic data (for obvious reasons I hope).

So whilst I understand the merit of analysing historic data to spot trend and patterns, predictive analytics is still guesswork, and will always be. Economists will never be correct in their predictions until such time as someone invents a time machine and they're able to see what the future holds (see Back To The Future sports almanac).

Therefore what I said previously about respecting their inability to predict the future still stands as I too know this pain well, when management is breathing down my neck to identify where the supply chain is going to experience problems ahead of time before we know what is going to be in the supply chain. They too struggle to understand this concept. Particularly when you try to expand their horizon and explain that such a simple thing as seasonal trend (the sun shines/it rains) will impact the outcome.

I cannot accept the weight or certainty attributed to the predictions of economists by society as a whole.