Monday 20 November 2017

Don't take it too seriously - economic forecasts are not exact science

Minister for Finance Michael Noonan speaking at the Spring Economic Statement at Government Buildings
Minister for Finance Michael Noonan speaking at the Spring Economic Statement at Government Buildings
Thomas Molloy

Thomas Molloy

Economist Tim Harford has made a career highlighting where economics is useful and where it fails us. One of the points he makes repeatedly is that forecasting is not an exact science; especially when it comes to big complicated systems like an economy rather than closed systems like a public transport scheme.

"Economists have allowed themselves to walk into a trap where we say we can forecast, but no serious economist thinks we can," he writes. "You don't expect dentists to be able to forecast how many teeth you'll have when you're 80. You expect them to give good advice and fix problems."

Society has always craved certainty - when there is no such thing. We know forecasts can be wrong, but the question we need to ask is whether the forecasts on which we rely so much are just a comfort blanket or whether they are a dangerous delusion.

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