IT'S no secret that economists are terrible at predicting recessions: a host of studies, along with a raft of anecdotal evidence, reveals a track record that is astonishingly bad. This has prompted a growing number of market watchers to conclude that forecasting recessions is a fool's game. Read more at The Business Times.
It's no secret that economists are terrible at predicting recessions: a host of studies, along with a raft of anecdotal evidence, reveals a track record that is astonishingly bad.IT'S no secret that economists are terrible at predicting recessions: a host of studies, along with a raft of anecdotal evidence, reveals a track record that is astonishingly bad. This has prompted a growing number of market watchers to conclude that forecasting recessions is a fool's game.
This means that their failure to predict is a problem altogether different from the failures emphasised by the random-walk hypothesis and other critiques of prognostication. Economists predict the future incorrectly, but their failures are, well, predictable. Does that mean they may be telling us something important after all?To understand the implications of this question, consider the typical progression of erroneous forecasts over the course of a recession's first year.
It's not hard to understand why this happens. Forecasters claim they're looking into the future, but they are actually examining statistics from the past. As a recession hits, the revisions go in one direction - down. And so the forecasters cut their prediction - but not enough. It's only when the enormity of a recession becomes inescapable that the forecasts catch up.
As always, they remained well behind the curve. But they were headed in the right direction. Indeed, it's striking that one of Mr Loungani's findings - one that rarely gets any attention - is that economists do not, as a general rule, incorrectly predict the onset of recessions. They generally don't make false calls in that direction.
If past patterns hold, this shift in sentiment over the course of 2019 suggests the startling possibility that the US is already in a recession, or at the very least, on the cusp of one. If true, virtually all economists will have missed this turning point.
Singapore Latest News, Singapore Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
China importers seek to lift tariffs on US farm goods: State mediaSHANGHAI (AFP) - Chinese importers are applying to their government to lift tariffs on some US agricultural imports, state media reported on Sunday (July 21), three weeks after the two sides reached a truce in their trade war.. Read more at straitstimes.com.
Read more »
China importers seek to lift tariffs on US farm goods: State mediaSHANGHAI: Chinese importers are applying to their government to lift tariffs on some US agricultural imports, state media reported on Sunday (Jul ...
Read more »
An evening of good music with family and friends at Straits Times Concert in the GardensSINGAPORE - Music lulled the audience in a sultry evening at the Singapore Botanic Gardens on Sunday (July 21), as the Singapore Symphony Orchestra (SSO) played to thousands of visitors at The Straits Times Concert in the Gardens.. Read more at straitstimes.com.
Read more »
China importers seek to lift tariffs on US farm goodsSHANGHAI: Chinese importers are applying to their government to lift tariffs on some US agricultural imports, state media reported on Sunday (Jul ...
Read more »
Toshiba Memory sees 'good chance' of M&A in push for data center businessJapan's Toshiba Memory said there was a 'good chance' of acquisitions as it pushes to increase its share of the market for advanced storage ...
Read more »
Iran confrontation with Britain points to history of bad bloodLONDON (BLOOMBERG) - The reopening of the British embassy in Teheran was meant to usher in a new era in relations.. Read more at straitstimes.com.
Read more »