Why the Forecasting Failure? A Hayekian and ‘Keynesian’ Answer

14 Pages Posted: 15 Jan 2015

See all articles by Nicola Giocoli

Nicola Giocoli

University of Pisa - Department of Law

Date Written: January 14, 2015

Abstract

The dismal performance of professional economic forecasters to foresee the financial crisis has raised serious questions as to the credibility of modern economics. Several efforts have been made to account for this failure. The paper offers a tentative answer based on the lessons that may be drawn from the wisdom of a short list of past and present economists: Hayek (§1), Neville Keynes (§2), Mankiw, Tinbergen, Maynard Keynes and Lucas (§4). The glue to keep such an odd bunch together is provided by science historian Ted Porter (§3). A natural science field that recently managed to survive a similar credibility crisis offers a success story to imitate (§5). Not casually, it is a story that confirms the validity of Hayek’s pattern predictions argument.

Keywords: macroeconomic forecasts, Hayek, pattern predictions, financial crisis

JEL Classification: B22, B25, B41, E37

Suggested Citation

Giocoli, Nicola, Why the Forecasting Failure? A Hayekian and ‘Keynesian’ Answer (January 14, 2015). Available at SSRN: https://ssrn.com/abstract=2550058 or http://dx.doi.org/10.2139/ssrn.2550058

Nicola Giocoli (Contact Author)

University of Pisa - Department of Law ( email )

via Collegio Ricci 10
Pisa PI, 56126
Italy

HOME PAGE: http://https://pisa.academia.edu/NicolaGiocoli

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