Mariano Torras, PhD, professor and chair of the Department of Finance and Economics, authored a letter commenting on an editorial asserting that it overstates the importance of economic forecasting.
Mariano Torras is a Professor and Chair of the Finance and Economics Department at the Adelphi University Robert B. Willumstad School of Business.
I believe the editorial (FT View, May 15) overstates the importance of economic forecasting. To say that in uncertain times economic forecasting is “perilous” suggests that much is staked on the accuracy of the forecasts.
Not so. Much of the public is quite aware that forecasters are frequently far off the mark. The fact that many retain their jobs despite poor performance might simply indicate that erroneous forecasts are understood to be the norm. The real “peril” in today’s uncertain times concerns the confluence of several major crises — eg climate change, mental illness, pandemic risk, spiralling inequality — that will undoubtedly produce adverse economic effects. To focus on macroeconomic statistics (the “trees”), as is the forecaster’s wont, misses secular trends in these far more consequential developments (the “forest”).
Perhaps it is time to discard the notion that economics is a predictive science and rely more on educated common sense to help navigate the world’s complexities.
Read the Financial Times article from May 15, 2023.
