Friday, August 21, 2009

A Note on Macroeconomic Forecasts

While I am prepared to suspend disbelief occasionally and accept intuitive or data-based directional forecasts of the macroeconomy, now is not one of those occasions. The error bars on any estimate are quite large at the moment: the economy could be entering full recovery or about to take another big plunge. The only prediction anyone with any sense can make at the moment is that we don't know what's coming next.

Note the people who do not make such a statement. Consider discounting their future predictions strongly.

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