Forecasters Forecasting Forecasts
Tim Harford wrote a piece in ft.com earlier this year, documenting the [not-so-surprising] inaccuracy and just-plain “wrongfulness” of economic forecaster[s] [ing]……
In the 2001 issue of the International Journal of Forecasting, an economist from the International Monetary Fund, Prakash Loungani, published a survey of the accuracy of economic forecasts throughout the 1990s.
The record of failure to predict recessions is virtually unblemished.
He reached two conclusions.
- The first was that forecasts are all much the same. There was little to choose between those produced by the IMF and the World Bank, and those from private sector forecasters.
- The second conclusion was that the predictive record of economists was terrible. Loungani wrote: “The record of failure to predict recessions is virtually unblemished.”
The authors returned to the topic during/after the “Global Financial Crisis”.
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