Posted: Jun 17, 2013 3:57 am
GT2211 wrote:http://noahpinionblog.blogspot.com/2013/05/what-does-it-mean-to-have-predicted.html
I've questioned the predictability of such crises* and have been rather skeptical of claims made by economists who claim to have done so. Most of those who claim to have done so have a track record of predicting all sorts of crisis in all sorts of places, many of which never turned out.
I think parts of the crises was predictable. I've previously posted a study on academic economists vs professional/real estate association economists in predicting the housing bubble which showed the acadmeic's had a much better record(they also didn't have a conflict of interest). I also think large parts of the crisis were resultant from bad policy decisions, decisions which I'm not sure how foreseeable they were.
I agree. It's largely a function of hit-counting and miss-forgetting combined with bad policy responses that weren't themselves particularly given to prediction.
This is one of many reasons prediction markets and well-publicized bets could be useful.