Saturday, May 17, 2008

Why economic forecasts are so hard to get right

Tom Hartford in Financial Times. He talked about economic forecasts but the same logic applies to other areas, e.g. earthquake prediction and risk assessment of invasive species: we still cannot predict structural breaks and all we are capable of so far is to identify them as they are happening.

Update: The structure breaks might also explain why CGE modelling is so challenging to do.

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