, Columnist
Recession Forecasts Are So Bad, They're Good
Economists, notoriously terrible at predicting downturns, may be inadvertently providing a useful service.
Something like foresight. But definitely not foresight.
Photographer: BettmannThis article is for subscribers only.
It’s no secret that economists are terrible at predicting recessions: a host of studies, along with a raft of anecdotal evidence, reveals a track record that is astonishingly bad. This has prompted a growing number of market watchers to conclude that forecasting recessions is a fool’s game.
But there’s another way to look at this dismal record. What if economists are so bad at predicting recessions that they’re actually good? What if a profession that consistently, almost universally, gets something wrong is inadvertently getting something right?