Saturday, May 25, 2013

Lars P. Syll — Are economists rational?

Lars quotes über-statistician Nate Silver suggesting NOT! Just when the market was suffering from "irrational exuberance" (Robert Shiller), most economists were "overconfident" even though they were in the favorable position of being able to acquire relevant data and presumably knowing how to use it. Prediction success? Abysmal.

Lars P. Syll's Blog
Are economists rational?
Lars P. Syll | Professor of Social Studies and Associate Professor of Economics, Malmo University

1 comment:

Bob Roddis said...

Economists in the Survey of Professional Forecasters, a quarterly poll put out by the Federal Reserve Bank of Philadelphia, nevertheless foresaw a recession as relatively unlikely. Instead, they expected the economy to grow at a just slightly below average rate of 2.4 percent in 2008 … This was a very bad forecast: GDP actually shrank by 3.3 percent once the financial crisis hit. What may be worse is that the economists were extremely confident in their prediction. They assigned only a 3 percent chance to the economy’s shrinking by any margin over the whole of 2008 …

We now know how those 2006 predictions of Peter Schiff and Mike Norman went:

And the predictions of Austrians in general: