How is Macroeconomics like the Weather?

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Oct 29, 2009 8:54 am

When Goldman Sachs announced it is revising it's 3rd quarter GDP number DOWN to 2.7% from 3.0% and then Commerce announces the VERY NEXT day that it's 3.5%.

Oct 29, 2009 12:02 pm

Goes to show nobody knows what the hell is going on. 25% difference in GDP numbers...sheesh...In weather terms it seems like predicting a sunny day and getting tagged with a hurricane.  

Oct 29, 2009 12:17 pm

Not sure I believe commerce department...not to say they are lying but maybe calculating differently..

 
Just like CPI, I think they totally make that one up...
Oct 29, 2009 1:39 pm

Possibly, but it won't be THAT far off.

Oct 30, 2009 2:08 am

The same way John Maynard Keynes preached the role of government spending interventionist economics and is the basis for Big Government and Milton Friedman won a nobel prize for economics while advocating minimal government intervention.

 
Everyone has to 'predict' what will happen by using metrics they believe in and in the end, it's just an educated guess. The Goldman guy theorized his metrics would go one way and they didn't.
Oct 30, 2009 8:03 am

LSU - like the weather. Think about when people are predicting hurricanes each year. Thirty-two named storms.

Oct 30, 2009 11:53 am

I'm not disagreeing with you.

 
Best quote I have heard to describe it is from Eisenhower I think. He once said 'What I really need is a one handed economist."
 
(For those of you that don't immediately get it, it's because most every economist will say, well on the one hand this could happen, but on the other hand this could happen).
 
It's interesting just because of that, the data is compelling for all sides and thus the debate continues.