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?
Pay no mind to the widespread layoffs and skyrocketing prices.
It’s because the field of economics is just bullshit
When you study economics you literally spend 0 hours learning how to predict macroeconomic outcomes such as inflation/gdp growth. The reason is that these systems are too complex to predict well, except in the very short run. Yet policymakers continue to ask economists to make long-run predictions, and many continue to comply.
I personally was asked to be a member of an expert committee for my country’s central bank. For any prediction my truthful answer was: I don’t know, so they kicked me out.
what kinds of stuff did they want you to predict?
Give it 2 more months, and it should be shot.
You CANNOT have as-much missing-supply-chain as we now have, and remain viable, endlessly.
_ /\ _
imo there won’t be a recession until economists stop predicting one. As soon as they start talking about a boom then you should get ready.
