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Jakarta Post

Economists should not make forecasts

  • Paul Donovan
    Paul Donovan

    Global Chief Economist of UBS Wealth Management

London   /   Fri, January 19, 2018   /  12:39 pm
Economists should not make forecasts Economic views often give a false sense of precision, because the reporting of economics is simplified and shortened.  (Shutterstock/File)

December always has a rash of economic forecasts for the year ahead. The reception areas at CNBC and Bloomberg TV are crowded with mobs of economists fighting to get their forecasts on air. But there are big problems with making precise economic forecasts. Economic models are not precise. Models use lots of assumptions. Those assumptions may not turn out to be true. Models give a range of possibilities rather than a single, certain number. Economists know and understand these issues. However, the world of hashtag economics does not allow for all of this to be explained. It is difficult to warn about possibility ranges and underlying assumptions in 280 characters. This is why economists should not use Twitter (follow me @PDonovan_Econ). Economic views often give a false sense of precision, because the reporting of economics is simplified and shortened. The illusion of precision is n...

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