Tag Archives: Prediction

Too much theory leads economists to bad predictions

By Peter A Coclanis – In economics, as a result, both economic history and (especially) the history of economic thought withered for a generation or two.

So what accounts for the recent change of course? For starters, there was the Great Recession – or ‘Lesser Depression’, as Krugman called it in 2011 – which seemed to a few influential economists such as Ben Bernanke, Carmen Rinehart, Ken Rogoff and Barry Eichengreen similar in many ways to other financial crises in the past. But there were other factors too, including the general retreat from globalisation, and the renascence of both nationalist and authoritarian movements around the world, which sounded the death knell for Fukuyama’s benign new world.

As ‘history’ returned, so too has a degree of acceptance of historical approaches among social scientists, who sense, however vaguely, that though history might not repeat itself, it often rhymes, as Mark Twain (might have) put it.

Thinking historically, of course, entails both temporal and contextual dimensions and, in addition, often requires a significant amount of empirical work. Indeed, finding, assembling, analysing and drawing accurate conclusions from the bodies of evidence that historians call data is not for the weak of heart or, more to the point, for those short of time.

So, bottom line: economic forecasters would profit from thinking a bit more about history before gazing into their crystal balls, or at least before telling us what they see. more>

‘Future That Never Was’ Looked Fantastic

BOOK REVIEW

The Wonderful Future that Never Was, Author: Gregory Benford.

By Jennifer Forker – Flying cars. Waterproof living rooms that you clean with a hose. A pool on every rooftop. Many of the old dreams and schemes about daily life in the 21st century didn’t come true — at least not yet.

“Just because high-tech change is possible doesn’t mean we always want it,” says James B. Meigs, editor-in-chief of Popular Mechanics magazine, noting the slow-food and handmade-crafts movements as high-tech counterpoints. “Sometimes affluence gives us the options to choose more traditional things. We choose clothing out of wool rather than synthetics.” more> http://tinyurl.com/l6hcoo8

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