from The Daily Bell:
Chief economist of Bank of England admits errors in Brexit forecasting … Andrew Haldane says his profession must adapt to regain the trust of the public, claiming narrow models ignored ‘irrational behaviour.’ The Bank of England’s chief economist has admitted his profession is in crisis having failed to foresee the 2008 financial crash and having misjudged the impact of the Brexit vote. -Guardian
The top economist at England’s chief central bank has said economists are often wrong. He called critisisms about lack of accuracy in forecasting a “fair cop” and said the industry would have to do a better job.
Andrew Haldane, said it was “a fair cop” referring to a series of forecasting errors before and after the financial crash which had brought the profession’s reputation into question.
Blaming the failure of economic models to cope with “irrational behaviour” in the modern era, the economist said the profession needed to adapt to regain the trust of the public and politicians.
Before Brexit, the actual head of the English central bank, Mark Carney, said that agreeing to Brexit would cause grave economic problems, So far that hasn’t happened yet. Then there was Lehman Brothers, which was supposed to have little impact on England. Instead it had a lot.
Haldane was speaking at the Institute for Government in central London. Despite his negative message, he was upbeat. He believed that economic forecasting could improve a good deal.
Nonetheless, Haldane is bothered by criticisms and is worried forecasts will not be taken seriously if they continus to be wrong,
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