Financial TimesFinancial Times

What Mystic Meg can teach us about economic forecasting

By Tim Harford

24 Mar 2023 · 4 min read

Editor's Note

This Financial Times feature takes both the mickey and the mystique out of economic forecasting — which is important, given how portentous, pretentious, and just plain wrong it can sometimes be.

Economist Ezra Solomon once quipped that “the only function of economic forecasting is to make astrology look respectable”. I’m not sure if the astrologer “Mystic Meg” was ever respectable, but she was certainly much loved. “Britain’s most famous astrologer by a million miles,” said her agent, after her recent death prompted an outpouring of affectionate recollections about her campy image and her arch forecasts about the National Lottery, praised both for their brilliant accuracy and sheer absurdity.

It seems hard to imagine that an economic forecaster will ever earn such valedictions. But many economic pundits seem to have been taking lessons from astrologers. Consider this horoscope: “The balance of risks remains tilted to the downside, but adverse risks have moderated . . . On the upside, a stronger boost from pent-up demand in numerous economies or a faster fall in inflation are plausible. On the downside, severe health outcomes in China could hold back the recovery . . . ”

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