By David Mc Williams
Over the past few days, I have received all sorts of economic forecasts of 2013 penned by economists in large financial outfits who are confidently telling me what is going to happen next year. Most of these guys were the same people who didn’t foresee this crisis, yet few have lost their jobs and here they are, without the slightest hint of doubt, outlining what is likely to happen in 2013.
Of all the characters we should fear, the overconfident economic forecaster is surely one of them. When the Queen of England asked why none of these professionals warned of the credit crunch, she was only articulating what many people must have thought, which is “if you guys are so clever, why didn’t you see this crisis coming – and if you didn’t see it coming, why should I listen to you now”?
The failure of economics to predict human behaviour is a significant charge that modern economists have not properly answered and the failure to answer this accusation adequately has undermined economics as a whole.
In the final column of the year, we are going to take a quick look at the state of the economics game and ask whether the fundamental laws of traditional economics bear any relation to reality or offer any insight into how people actually behave……………………..
- How to re-establish economics as a realist and relevant social science (5 changes) (rwer.wordpress.com)
- Why you should ignore economic forecasts (cbsnews.com)
- Minn. Economic Forecast Kicks Off Budget Season (minnesota.cbslocal.com)