Economists and weathermen..

CLAPTON

wotsthat wrote: »

Of course you're being sarcastic. I'm sure you read every BoE inflation report from start to finish and have many issues with the quality of the reports and the logic behind the conclusions they reach.

If someone can demonstrate the way to forecast the future is to take a BoE forecast and apply a certain factor to account for the BoE forecast always being wrong there's a Nobel prize in it for them.

why is comparing BoE actuals with forecasts being sarcastic?
are you uncomforatable with the likely results?

wotsthat

Graham_Devon wrote: »

Take it you don't much care for the article then?

Does it not confirm your bias?

It's quite a large story to be fair. Complaining about the "amount of threads" when there appears to be very few on the subject of economists suggesting they themselves got it wrong appears to translate into a complaint about such issues being put in front of you.

I read the BoE inflation reports (well skim them).

I'd suggest they're well written, well researched and the conclusions they reach are based on sound principles. Only fools don't realise the uncertainties of forecasting the future even though the reports cover this. People must just think economists are nothing more than forecasting monkeys (I blame crap like Bloomberg TV where a bad company result is one which isn't as good as analyst expectations).

The future is uncertain and I'd prefer to read the views of the BoE than rely on 'the man on the street', Graham from Devon or, indeed, rely on my own in-depth research into the price of Marmite.

Yes I have biases - it's nice to have the self awareness to realise this.

wotsthat

CLAPTON wrote: »

why is comparing BoE actuals with forecasts being sarcastic?
are you uncomforatable with the likely results?

Saying you agreed with me was sarcastic given your 'regard' for economists has been expressed before.

Feel free to carry out the research. I think there's a cash prize when you get the Nobel prize.

Graham_Devon

wotsthat wrote: »

I read the BoE inflation reports (well skim them).

Great - but this isn't about inflation reports, so it would seem your post misses the point.

It's about the fact they didn't even see the crisis in 2008, though admit the warning signs were there, they just didn't want to look at them.

It's also about the brexit vote.

That's why Haldane specifically states that they are not very good at looking outside of the box.

Malthusian

Breast-beating, essentially. Haldane says "the profession is in crisis having failed to foresee the 2008 financial crash". Every economist with integrity and two brain cells to rub together had been warning for years prior to 2008 that the credit bubble was unsustainable and was the likely cause of the next crash. They couldn't predict the exact year it would happen (except the Dr Doom types who predict a crash this year every year), but that's not what economists do.

(I exclude eunuch economists who work for the government and whose job it is to trot out political pronouncements in pseudo-economic language.)

There are similarities between economists and weather forecasters and most decent economists would be flattered by the comparison given how much weather forecasts have improved recently. One similarity is that when a weather forecaster says that there will be 6mm of rain tomorrow, and it turns out to be 8mm, I do not run around shouting that weather forecasters are useless. Instead I am glad that I brought an umbrella. Likewise when a weather forecaster says there's an 80% chance of rain at 6pm, I don't moan about weather forecasting being witchcraft if it doesn't rain.

I don't pay a great deal of attention to month-to-month predictions of inflation and economic growth, they are largely of academic interest. Just as I don't pay much attention to exactly how much rain in millimetres the weatherman thinks will fall. These predictions do however need to be run because government budgets and forecasts have to be based on something.

What matters to me is the broader picture, i.e. whether I should pack an umbrella or not. Few of us need to know what the exact inflation rate will be in 2017 to 0.1 of a percent. But for those of us running simulations of whether our retirement funds will last us for our lifespan, we want to know whether we should assume an inflation rate of 2% or 12%.

Malthusian

On the subject of duplicate threads, this is eerily similar to the thread proclaiming to be a list of "appalling predictions" by economists, which actually turned out to be a list of appalling predictions by politicians, journalists and communist activists, with almost zero economists.

wotsthat

Graham_Devon wrote: »

Great - but this isn't about inflation reports, so it would seem your post misses the point.

It's about the fact they didn't even see the crisis in 2008, though admit the warning signs were there, they just didn't want to look at them.

It's also about the brexit vote.

That's why Haldane specifically states that they are not very good at looking outside of the box.

Don't think I've missed the point. The inflation reports have quite specific forecasts within them and my gut feel is they've not been that accurate so the data's there to prove a point.

Of course I know now that every man and his dog knew a credit crunch was going to happen except for the BoE. Oh yes, and Brexit.