Undercover Economist: Predict the future? We can’t even say what’s happening now

On New Year’s Eve 2007, the Financial Times, in its customary look at the year ahead, declared that “the US will skate along the brink of recession in early 2008, but should avoid tipping over the brink”. In retrospect, we can ruefully enjoy that forecast not because it proved to be wrong – although it was – but because it was wrong even as it was published. The recession actually began in December 2007, just as the FT was announcing that it wouldn’t begin at all. To modify the old quip, “prediction is very difficult, even when it’s not about the future”.

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