Australian Economists Predictions No Better Than Flipping a Coin

First time accepted submitter ras writes "The Reserve Bank of Australia did some investigation into the accuracy of their economic predictions — the ones they use to run the country — with less than flattering results. '70 per cent of the RBA's forecasts for underlying inflation for the year ahead were close to the mark, but its predictions of economic growth were less accurate, and its unemployment rate estimates no better than [chance] ... The Reserve Bank employs numbers of people on very high pay and what they're admitting now is that their — all of this so-called science — has produced nothing more than what a roll of the dice could produce.'"

Comments

Karma Whoring actual RBA paper & stuff

[tqft]

The page with everything linked on it
http://www.rba.gov.au/publications/rdp/2012/2012-07.html
Estimates of Uncertainty around the RBA's Forecasts
Abstract:

We use past forecast errors to construct confidence intervals and other estimates of uncertainty around the Reserve Bank of Australia's forecasts of key macroeconomic variables. Our estimates suggest that uncertainty about forecasts is high. We find that the RBA's forecasts have substantial explanatory power for the inflation rate but not for GDP growth.

Download the Paper [PDF 713K] and the Data.
http://www.rba.gov.au/publications/rdp/2012/pdf/rdp2012-07.pdf
http://www.rba.gov.au/publications/rdp/2012/2012-07-data.html

Licence
http://www.rba.gov.au/copyright/index.html

Re:Economy is not a science.

[lxs]

Don't forget: Astrology relies heavily on extremely accurate and proven celestial mechanics. It is still bunk.
Econometrics (bookkeeping with differential equations) is a real science. Economics is at best a pseudoscience that has built a cargo cult around the results of econometrics.

Re:Economics - Simple Vs Complex system modelling

[FriendlyLurker]

Better link to the google talk by Steve Keen. and the short intro video "Minsky, turning economics into a science".

Re:Economy is not a science.

[Anonymous Coward]

You are being extremely ignorant of the Australian situation and really are just parroting the government spin. The reason we didn't go into a recession had nothing to do with the government spend. Australia was one of the few countries with extremely strict banking regulations which meant banks could not leverage themselves in the fashion they did in Europe and the US and hence no initial funding crisis, secondly as much as our banks suck they don't use the ridiculous sub prime lending practises that the US practised and thirdly our economy was massively supported by the mining industry shipping ore at record prices to China. What the government did was purely a PR compaign.

Re:Eh mate?

[alexgieg]

When did we go from talking about Australian to Austrian?

Just wondering?

I think you're joking, but if not, "Austrian" is the name of a school of economic thinking. It's called that because, different from Marxism (from Marx's name), Keynesianism (from Keynes') etc., it had more than a single founding economist, and most of them where from Austria. I guess it could be named "Bawerkism" from its very first economist (Eugen von Bohm-Bawerk), but that's not how it went. Besides, although Bohm-Bawerk was the first, the most famous were Ludwig von Mises and Friefrich von Hayek, so that you do find people talking about "Misesian" and "Hayekian" when focusing on particular ideas from either. So, we're stuck with calling it "Austrian Economics". What, admittedly, is a source of confusion.