Want a Recession Forecast? Ask a Machine

Academic macroeconomists almost never try to make forecasts about the macroeconomy. That probably sounds almost unbelievable to most people, but it’s true — look at any macro paper in a mainstream economic journal, and there’s only a very small chance that it will be about forecasting. There are one or two economists out there who are deeply interested in the reason for this, and a small trickle of promising papers. And some economists do pay attention to their models’ forecasting performance. But the vast majority of research is about predicting the effects of policies, rather than about predicting what will actually happen.

This might seem like a dereliction of duty. Many, such as the Queen of England, expect that economists should be able to see recessions coming — or at least to try. After all, weather forecasters try to predict storms and heat waves, right?