Even though, as you example, the "International Monetary Fund's short-term forecasts for Europe, which were wildly off the mark, so it may seem that forecasts to 2050 are an exercise in irrelevance..." there is an upside to "the dark art of economic forecasting"...

in the number of goats saved as a result of their entrails not being examined for portents of the future funds.

However, here is a simple suggestion for improvement:

Every economist or forecasting business gets one go, over any timeframe they chose, to make an analysis. Only after such a time and only if their forecasts were accurate are they allowed to make another.

Seeing as how so much 'economic activity' is tied up in totally ignoring such a prescription, I don't expect any change to this so-called service industry.

So, Tim, I will share your disdain about clouded balls by not rushing to place a deposit in a Nigerian Prince.

>>The only function of economic forecasting is to make astrology look respectable.<<
- Ezra Solomon

>>If economists wished to study the horse, they wouldn't go and look at horses. They'd sit in their studies and say to themselves, "what would I do if I were a horse?"<<
- Ronald Coase

Cheers,

Tony

As Sam Warner famously said: "Never make predictions, particularly about the future".

You silly boy Tim.

Now, after this article, you will be excommunicated from academia, & removed from access to a number of lucrative career paths.

An Ivy league study that followed 300 economists over a period of thirty years, discovered that their results were no better than a dart throwing monkey.
Moreover, their predictive abilities declined in direct inverse proportion to their notoriety or reputations.
Besides, the clever economist simply postulates rather than predicts.
Like say, if it doesn't rain it'll probably remain dry?
Or put yet another way, ah to be sure, to be sure, if it weren't for all that rain, hail, snow, ice and howling gale, it'd be a nice, fine, warm and sunny day!
Rhrosty.

surely there is a line here in the same vain as those who can do and those who can't teach....maybe
Those who cam make money and those who can't forecast?

With reference to the differences between Africa and Europe we find better predictive power in Jardine's Law:
"Political stability is inversely related to musical grooviness."

Yes, indeed.

The "dark art of economic forecasting" had already been outed-

"Future Babble-Why Expert Predictions Fail - and Why We Believe Them Anyway" by Dan Gardner.

Certainly institutions play a much more important role than economists seem to assume.

My favourite daft predictions are-

(1) Russia becoming a liberal democracy after the collapse of the Soviet system.
(2) Japan as the world's #1 economy.
(3) BRICS.

Right on. Those crazy economists, eh.

It's like saying if the weather forecasters can't hit the mark a week in advance, why should we pay any attention to what they say will happen by the end of the century.

Oh. Right.

Am I missing something in the analogy?

If weather forecasters were also a causal factor and helped create the 'conditions and environment' for the weather and still got it very wrong, I'd certainly pay much less attention to what they say... or is economics a system (like weather) subject to the vagaries of chaos theory and inherently unpredictable?

Best of both worlds maybe? "Outlook: mostly fine with a chance of isolated gains throughout the afternoon ahead of increasing repositioning during the evening and overnight trading."

It seems to be universally acknowledged that economic forecasting is drivel. The real mystery is why such unreliable and potentially damaging guesswork is given so many column inches and so much credence. Post graduate research, anyone?

Yep ultimately God is sovereign over economic systems and weather.

That's the one, WmTrevor.

>>... is economics a system (like weather) subject to the vagaries of chaos theory and inherently unpredictable?<<

Economic theory essentially needs the system to be stable - or at least, part of the system to be stable at any point in time - for its forecasting to have any meaning. This is difficult to achieve in a short timeframe, since we humans are involved at some point. The supply side is driven by ambition and greed (that's them banker folk), and the demand side by a need to be noticed (bigger car, newer TV). Hence the day-to-day system is inherently unstable and prone to chaos.

Once you have eliminated this "noise", however, there are some basic truths that allow you to predict quite accurately a longer-term picture, of whether an economy will thrive or dive.

Same with the weather. Short term, will it rain next Friday. Long-term, which direction is the climate heading.

This is a good point too.

>>If weather forecasters were also a causal factor and helped create the 'conditions and environment' for the weather and still got it very wrong...<<

Neither weather forecasters nor economists' predictions have the slightest impact on either the rain or the recession.

We may - or economists may - like to believe that important decisions are made as a result of their pontifications, but look what actually happens. On any day, the government will have a dozen economic forecasts to choose from. They will select the one that is most politically expedient - i.e., they take the decisions they would have made anyway, in the absence of any forecast at all.

Thanks, Pericles...

So basically people (as always) are the problem whichever way you look at it. Unless we factor in runner's point:

"Yep ultimately God is sovereign over economic systems and weather."

Which seems to relegate God to being the 'vagaries of chaos theory and inherently unpredictable' or a soverign currency?

sovereign! dammit (I think God just proved my point about chaos

A large amount of time is devoted to economic forecasts on the ABC radio news, no effort seems to be made to check what percentage of previous forecasts have been correct and so decide if economists should be given any time on the programme.

To which, askari, the obvious response is:

"A large amount of time is devoted to weather forecasts on the ABC radio news, no effort seems to be made to check what percentage of previous forecasts have been correct and so decide if weather forecasters should be given any time on the programme."

Accuracy is really not the issue. It's about information.

Since economists don't actually control any of the levers that affect the economy - interest rates, commodity prices, taxation rates, inward investment etc. etc. - they can do no more than speculate. Critically, such speculation depends upon which particular "school" they belong to, and how they treat the (many, many) variables involved.

Would you prefer, perhaps, that we don't bother with any forecasting at all, either weather or economy related?

How dull that would be, to be sure.

(Dull, with occasional showers, WmTrevor)