The future of economic forecasts is unclear
In last week's column, I warned against DIY economics - the false propositions that people who know little about economics think are true. Since then, my mailbox has been filled by people who say they are sticking to DIY because they have been let down by cowboy tradesmen. Not dodgy decorators or crooked carpenters, but economic forecasters.
Most economists do not do forecasting and, like honest craftsmen, they resent those who earn more money for shoddier work. Several decades ago, in the first flush of naive enthusiasm for the potential of computers, many people believed that large models would describe the evolution of the economy ever more perfectly. But these hopes were unfounded. It is not that economists are insufficiently clever, or their tools insufficiently powerful. Predicting whether the dollar will rise or fall in the second quarter of next year, or the level of the Standard & Poor's index at the end of 2004, is in principle impossible.
The reasons fall into two main groups. Many of the processes we find in commercial and economic life are dynamic and non-linear. What this means in everyday life is that small differences in where you start can make a large difference to where you end up. Almost everyone is now familiar with the metaphor of the butterfly whose flapping wings provoke a tornado weeks later, thousands of miles away. If small events can have large effects on complex systems, even knowing 99 per cent of what you need to know leaves you vulnerable to large errors. And 100 per cent knowledge is impossible.
That is why we can never aspire to accurate forecasting of economic events, just as we can never know whether it will rain on 4 June next year or the date of the next Tokyo earthquake. But economics is even harder than meteorology or seismology. Most economic systems are reflexive - what happens is influenced by how we perceive what will happen. Good mechanisms for forecasting stock prices will not be found because their very discovery would affect stock prices. If there had been reliable predictions that the value of the euro would move from $1.17 to 81 cents and back again, these movements would not have occurred.
But we can identify earthquake zones even if we cannot predict earthquakes and we can look forward to summer even if we cannot forecast the weather on 4 June next. Seismologists tell us where not to build our houses, and meteorologists help us know where to sell sun cream and when to take an umbrella. Useful economic knowledge is of a similar kind.
When the value of the euro fell below a dollar, it was virtually certain to appreciate, because it is rare for the currencies of rich countries to deviate so far from purchasing power parity for long. But no one could have successfully predicted just when the euro would appreciate, or that it would first fall to almost 80 cents, although the pattern of momentum in the short run and mean reversion in the long run is a common feature of speculative markets. And, in answer to the questions some readers may be asking: you need to take an economics course to learn about purchasing power parity and mean reversion, and a physics course to learn about momentum, and yes, I did fill my boots with euros at an average price of 87 cents.
But, despite the inevitable failures of economic forecasting, people continue to want the knowledge it would provide. As even DIY economics will tell you, where there is demand there will be supply. Cowboy tradesmen remain in business because there are always gullible customers, and the same is true of economic forecasters.
But when someone tells you that the dollar will appreciate in the second quarter of next year, or what the level of the S & P will be at the end of 2004, they do not know what they are talking about. If they did, they would not be making these predictions. But if you stop asking economists to forecast the future, there are other interesting things they can tell you. I predict this column will appear again next Wednesday, and hope you will find something in it to enjoy and profit from
不可预测的经济前景
在上周的专栏文章中，我对DIY经济学的危险提出了警告。所谓DIY经济学，是指那些对经济学知之甚少的人认为正确、但实则错误的观点。自那以后，我的邮箱里塞满了邮件。发件人说，他们将坚持DIY，因为那些不负责任的手艺人令他们很失望。他们说的不是那些偷工减料的装修工或奸滑的木匠，而是经济预测专家。
多数经济学家都不做预测工作，而且，像诚实的手艺人一样，他们憎恨那些活儿较次,工酬不符的人。几十年前，许多人刚刚开始对电脑潜力产生天真的热情，当时他们相信，大型电脑能描绘有史以来最完美地经济发展进程。但这些希望是毫无根据的。并不是经济学家不够聪明，也不是他们的工具不够强大，而是预测经济事件原则上是不可能的，比如明年第二季度美元是涨是跌，2004年底标准普尔指数(Standard & Poor's index)将处于怎样的水平等。
原因主要有两类。商业及经济生活中的许多过程是动态的，非线性的。这在日常生活中意味着，最初的细微差别能导致最后结果的大相径庭。现在，几乎人人都熟悉这个比喻：蝴蝶轻拍一下翅膀，几周后能在几千英里之外引发龙卷风。如果微小事件就能对复杂系统产生重大影响，那么即便已了解了99%需要了解的情况，还是极易铸成大错。而百分之百的了解是不可能的。
这就是我们决不能奢望准确预测经济事件的原因，正如我们决不可能知道明年6月4日是否下雨，或者东京下次发生地震的日期一样。但经济学比气象学及地震学更难。多数经济系统具有反射作用：我们认为会发生的情况会对真正发生的情况产生影响。人们不可能找到可靠的股价预测机制，因为找到这一机制本身就会影响股价。如果当初有可靠的预测表明，欧元汇率将先从1欧元兑1.17美元跌至81美分，然后再回升，那么这样的波动就不会发生了。
但是，即使我们无法预报地震，也能确定地震带；尽管我们无法预测明年6月4日的天气，但却能预见夏天的到来。地震学家告诉我们哪里不适宜建造房屋，气象学家则帮助我们了解哪里防晒霜好卖，何时要带雨伞。有益的经济知识与此类同。
当欧元币值降至美元以下时，几乎可以肯定欧元会升值，因为富裕国家的货币很少会长期如此大幅度地偏离其购买力平价。然而，尽管短期动量型态和长期回归平均趋势是所有投机性市场的一个共同特征，但没有人曾成功预知欧元何时升值，或者预见欧元兑美元汇率会先跌至近80美分的水平。另外，一些读者可能会提出一些问题，以下是对这些问题的回答：你得学习经济学课程才能了解购买力平价和回归平均，还得学习物理学课程才能了解动量，是的，我的确买进了大量欧元，平均价格是87美分。
不过，尽管经济预测失灵在所难免，人们仍希望能从经济预测中获得知识。就连DIY经济学也会告诉你，有需求就有供给。缺乏责任感的商人仍在营业，因为总有容易上当受骗的顾客。同理，经济预测专家也仍在发表预测。
但若有人告诉你，美元将在明年第二季升值，或者标准普尔指数2004年底将处于某个水平，那么连他们自己都不知道在说些什么。否则，他们就不会做出这样的预测。但是，如果你不再要求经济学家预测未来，那么经济学家还可以告诉你其它有趣的事。我就能预见，这个专栏下周又会出现，希望你能在其中发现有趣而有利的东西。
