A widely predicted recession never showed up. Now, economists are assessing what the unexpected resilience tells us about the future.
The recession America was expecting never showed up.
Many economists spent early 2023 predicting a painful downturn, a view so widely held that some commentators started to treat it as a given. Inflation had spiked to the highest level in decades, and a range of forecasters thought that it would take a drop in demand and a prolonged jump in unemployment to wrestle it down.
Instead, the economy grew 3.1 percent last year, up from less than 1 percent in 2022 and faster than the average for the five years leading up to the pandemic. Inflation has retreated substantially. Unemployment remains at historic lows, and consumers continue to spend even with Federal Reserve interest rates at a 22-year high.
The divide between doomsday predictions and the heyday reality is forcing a reckoning on Wall Street and in academia. Why did economists get so much wrong, and what can policymakers learn from those mistakes as they try to anticipate what might come next?
As one particular youtube Economist puts it: nobody can predict the future, least of all economists.
The best they can ever do is look at the data in front of them and say, “well, in the past we’ve seen this sort of situation lead to X, so we think that we’re likely to see X again in the near future.” On top of that much of what they are doing is probability based best guesses. So, they may be looking at economic data and say, “well, we think it’s a 65% chance of X.” And then “news” organizations will report that as “Economists think X will happen, and here’s how it’s going to cause DOOOOOOOOM!” Of course, those numbers assume they have good data, which is not always the case.
That said, it’s probably better to bet with macroeconomists than against them. They may get it wrong, but they probably get it right more often. Just don’t bet the entire farm on what they say. 'Cause, you know, they do get it wrong from time to time.
holy shit lmao
He’s on Youtube and claims to be an Economist. I can’t prove it one way or the other, though I personally believe he is. Didn’t want to look like I was advertising, so didn’t name/link him and also didn’t want to claim his tagline as my own.
There are plenty of highly educated making videos explaining happenings in their fields. This ridicule is uncalled for
lol
Young people - oh my god old people believe everything they read on Facebook!
Also young people - well this guy on YT says he’s an expert so it must be true
No information is better than the sources provided
This is why I follow the old saying: “Believe everything you read in the newspapers.”