Why Predicting Global Economic Trends Is So Difficult
Thousands of individuals earn a living simply on trying to predict global financial trends. Millions of articles are written every year offering financial forecasts. And billions of dollars in resources are committed to developing a sketch of the next general global economy. Every year, they are proven wrong.
Why? That is the question addressed in a new paper by Brookings Institute scholar Daniel Drezner, who examines why the ability to forecast the next generation global economy is so difficult, and offers up a different lens to think about the global economy for 2036.
“Even over the short run, both economic and geopolitical predictions have been far from perfect. The quality of long-range projections has been even worse. The result is a market for lemons in predictions: an inadequate supply of low quality forecasts. Despite a strong demand for thinking about the next generation’s global economy, the supply has been insubstantial in every meaning of that word,” he contends.
One of the more obvious examples of forecasters missing the predictive boat was the 2008 financial crisis.
Drezner says the blindness to the coming crash could be attributed to political pressures placed on institutional economists at the U.S. Office of Management and Budget or the World Bank.
But, he notes, the private sector was no more accurate.
“However, multiple studies suggest that the international financial institutions’ short-run and medium-run forecasts are similar to private-sector efforts. Neither private sector nor public sector efforts at forecasting have been particularly good at predicting recessions. And neither group of forecasters foresaw the magnitude of the 2008 financial crisis. As FiveThirtyEight founder Nate Silver noted ‘the best way to view the financial crisis is as a failure of judgment—a catastrophic failure of prediction,’” Drezner concludes.
Think Tanks Release Grand Strategy To Fight ISIS
The Institute for the Study of War and the Critical Threats Project at the American Enterprise Institute joined forces over the course of several weeks to design and develop potential courses of action that the United States could pursue to defeat the threat from the Islamic State. Their findings will be published in a series of reports.
The first report, has just been made public, focuses on examined America’s global grand strategic objectives as they relate to the threat from ISIS and al Qaeda, and the second report compared the strategic interests of the United States and the interests of other nations, including Russia, Turkey and Saudi Arabia.
The Ongoing Impact Of The World At War On How History Is Told Paul Beston of the Manhattan Institute reflects on the ongoing impact of The World At War, the 1973 series which chronicled World War II, and why it remains the standard for documentaries on the deadly conflict.
One of the reasons for the series’ imprint on history is simply that the Second World War is still the most consequential event of the 20th Century.
“Seventy years after its end, World War II, the definitive event of the twentieth century and perhaps of the entire modern age, remains enormously consequential, as the West was reminded in 2014, when Vladimir Putin annexed Crimea and menaced independent Ukraine, dredging up in the process unresolved conflicts involving the Nazis,” observes Beston.
It was at the time of its airing, the series was praised as “the best war documentary ever shown on television,” and decades later is a vital part of the scholarship on the war.
“In an age in which every impetus pushes us toward screens, rather than pages, The World at War can help us understand something, at least, about the deadliest conflict in history,” he adds.