last38.txt - Another reaction to the forecast gloom was from Iain Martin Futurology is futile he tweeted above his Times piece Unfortunately futurology

last38.txt - Another reaction to the forecast gloom was...

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Another reaction to the forecast gloom was from Iain Martin. Futurology is futile he tweeted above his Times piece. Unfortunately, futurology is essential. Why? Because there are long lags between deciding to do something with fiscal policy [or monetary policy for exampe] and those decisions having their full effect on the things that we care about [like growth, debt, inflation, cost of finance]. In the case of fiscal policy it can take quite some time between making a decision to spend more and having any effect on anything whatsoever [viz the myth of shovel ready projects ]. So, in order to make sure that your fiscal instrument settings are doing the right things to what you care about you have to line up candidate alternative fiscal plans against what you forecast will happen to what you care about. The OBR forecasts will no doubt prove to be wrong ex post. All forecasts are. But that won t invalidate them as forecasts now. [Tired example: when I roll a six sided dice 10 times and get a total score of 60, my forecast of a 35 is not proved wrong]. If you are a technological pessimist, you might plausibly be tempted to extrapolate flat productivity from the last 10 years very far out
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  • Fall '15
  • DR. Aimal

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