This
week issue of The Economist is rich in forecasting charts;
two of them are on the right, rollover for another two. In those
charts the data are from the cited sources but the forecast is of The
Economist, obviously.
Economic
forecasting is not new for The Economist: for years I was
amused by their forecasting, a year ahead, of economic and financial
indicators for over forty countries, week by week, done by The
Economist poll or Economist Intelligence Unit. Amused
because, in general "prediction is very difficult, especially
if it's about the future" (Niels Bohr, Nobel laureate in
physics). Forecasting starts with certain assumptions based on the
forecaster’s experience, knowl- edge, and judgment. "The most
reliable way to forecast the future is to try to understand the
present" (John Naisbitt, American author and public speaker).
Clearly statistical techniques are not sufficient for a forecast; it
is necessary to understand how the players in economic life hung
together. The underlying complexity of economic life, however, makes
it look like "the only function of economic forecasting is to
make astrology look respectable" (John Kenneth Galbraith,
Canadian-American economist). The last quote is probably too
pessimistic but with a message nevertheless. It’s plausible to
assume that The Economist got a message of that type: the
issue of Aug 20, 2011 was the last one with the above mentioned
forecasting, a year ahead, of economic and financial indicators.
And
now, in this week issue, a flood of forecasting charts. Why? Maybe
the Economist Intelligence Unit is following the motto
"my interest is in the future because I am going to spend the
rest of my life there" (C.F. Kettering, 1876-1958, American
inventor, engineer, businessman, and the holder of 186 patents).
Please,
don’t get me wrong: my comments on the forecast- ing charts are not
here to diminish the quality and the sub- stance of the Economist’s
charts. On the contrary, the numerous and well built charts are the
flagship of Economist way of reporting. On many
instances, just looking at a chart invokes most of the substance of
the accompanying article. Look, for instance, on this week charts
describing the depen- dence on Iranian oil, the value profile for an
Apple iPad, and the rise of state capitalism.