Minor rant: If I were Queen of the Universe, #12 on my list of proclamations would be this: We stop saying/writing/reporting things like “Market fails to meet analysts’ projections”, or “The 3rd quarter figures were lower than predicted.” All such utterances should place the blame where it goes: On the economists, not on the figures.
“Analysts fail to predict market. Again. So far this year, they’re doing only slightly better than chance. Could you remind me why we’re paying them?”
“For the 23rd quarter in a row, the economists are wrong. This time they only missed the answer by 3%, which is pretty good, for them.”
I used to think that economics wasn’t a science, but I’m broadening my definitions. I think macroeconomics is an interesting way of looking at the world. I find the Freakonomics podcast fascinating, for example. But that doesn’t make economics a good way of predicting the likelihood of a specific event–certainly not to the degree you can rely on in chemistry or physics.
It’s kind of like weather forecasting for my neighborhood vs. meteorology for the planet. You can still call it science, if you’re using “science” to mean a “way of knowing”. It just falls apart a little when you get to the “replicability” standard for scientific merit. I’m OK with that–I don’t require that level of rigor from everything I believe. Love isn’t predictably replicable. Nor is poetry, or faith. But economics is pretending to be chemistry, when it’s arguably more like astrology, and that pretense bothers me.
I want to put an image here from Demotivators.com, because it would be funny. However, I’m pretty wary of image-searching-lawyer-bots, so I’ll just link to it instead: http://demotivators.despair.com/demotivational/economicsdemotivator.jpg. Enjoy.