Posts tagged as:

forecast

Great expectations

November 27, 2009

I've previously covered the danger of attributing meaning to a forecast which is obviously based on little or no information. In that case, it was the manufacturing survey, which one might dismiss as a more obscure measure. Recently, however, Ken Houghton has written a pair of posts on inflation forecasts that bring me back to […]

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Random forecasts (with echoes!)

June 15, 2009

And speaking of forecasts, I'm reminded today of one of my favorite forecasting errors: the echo. This morning, the manufacturing survey missed the forecasted amount, and many pundits commented that it contributed heavily to the market's fall. Here is a plot of the manufacturing survey level as reported each month in red (prior to any […]

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Truth in advertising?

June 15, 2009

I find this graph very interesting, not just because of any implied political statements, but for how it highlights the absurdity of economic forecasting and the potentially misguided trust we place in such numbers. The blue lines were circulated by Obama's economic team when they were pitching the stimulus bill in order to illustrate its […]

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