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Uncertain Times, Unreliable Prophets

By: Cielito F. Habito, PhD
 
There hasn’t been a time in recent memory when planning for the short- to medium-term had been as difficult as it is now. As an economist often asked by groups and firms to speak on the economic outlook on which to plan their organizations’ way forward, about the only thing definite I could say about the near future is that things are indefinite. Forecasting has never been a precise science, more so with economic forecasting, where we economists invariably make it a “two-handed” exercise (weather forecasters at least have their satellite photos). That is, it entails saying “on one hand…” and “on the other hand…” to describe the same thing, which to some, amounts to saying nothing. That’s why there’s the joke that the hardest thing to find in the world is a one-armed (or at least one-handed) economist.
 
Economists tend to be masters at finessing that, of course. Take how the formidable International Monetary Fund describes the short-term prospects for the world economy, in its latest World Economic Outlook: “Economic activity is projected to pick up pace in 2017 and 2018, especially in emerging market and developing economies….” Yet in the very next bullet, it says: “Growth prospects have marginally worsened for emerging market and developing economies…” and “the balance of risks is viewed as being to the downside.” Not exactly a great way to inspire confidence in our craft, I’m afraid.
 
One wonders if those bullets were written by two different economists (they’re a dime a dozen at IMF, after all), or by yet another two-handed economist whose right hand doesn’t know what the left hand is doing (or, in this case, saying). Which is probably why economists, along with lawyers, have what could well be the two most maligned professions on the planet. Like lawyers who can as convincingly argue either of the two opposing sides to any particular case, depending on who is paying, economists can either be “prophets of doom” or “prophets of boom.” At least for us economists, the difference is usually a question of opinion, rather than one of compensation—with due apologies to my many lawyer friends.
 
Read the full article at http://opinion.inquirer.net/101170/uncertain-times-unreliable-prophets

1/27/2017