Jan 11, 2017|
James Mackintosh (WSJ, Economists Forecasts) by The Financial Exchange
Transcript - Not for consumer use. Robot overlords only. Will not be accurate.
For some reason I have a lot of friends were economists mattered fact tonight on going to be having dinner with. At least two different economists and so I surround myself with them and learn a lot from him but boy they seem to be inaccurate pretty regular. Our guest is James mackintosh from the Wall Street Journal I don't James. So why did god create economists and get it into. Well Dan the old chicks say the and please JK Galbraith the great historian of the game bottom line which was. To make the astrology is look at. I hit it and it controller errors and it's. Went to at what are the variables. That make it tough for economists to make predictions. What kind of basic problem in differently. So if you think about it things that affect the economy it's it's pretty much everything so. You know you gotta you gotta have. Number. What whereas this year and what happened to the price of all it'll happen to share prices temple deal. So it might be war that might be. Major panic collapse changes to taxes. You know it just it kind of goes on and on you know I think about the number of things that can affect the economy it's basically the number of things Barack. I'm new technologies all sorts of things that they you know guilt my problem is that this is a very very complicated system. You deeply because it includes virtually everything I'm just trying to full cost something you know. Frankly economical costing just isn't capable to do. Gentlemen cast human behavior right you're trying to forecast what the response is going to be. But what are you gonna. They cannot see these and you know all of those things it just straight factual but you know is that going to be toward the Middle East you know you know like a big difference to pupil costs for the US economy. That's actually behind all of this even to people cultural factual things wrong evil to predict animal spirits. All people going to be at that spending. How people gonna react to that a factual news and I think all of this particular. We've just seen them win the UK the bracket plant. Economists still the reaction would be you know the people sort of hunker down and come back their spending and they didn't. So little cultural. So it's it's it's really can't think people to Japan to get their arms around and make predictions about. Would do would you seeing you when you talked to economists would you getting as the forecast for growth this year and next year. What city average this year is 2.2 5%. Which is. Precede the whole personal. He no totally legal folk. You know sit next to different people at that still up in the look at any. How would it be dissipated because that the exit is an entity is so we just about to get the first 1% next year. Which we don't go yet but I would guess it'll be a bit on app. But it'll be practically meaningless I mean discard it definitely. There's just too much it'd be the way to full cost what the full cost is saying is political wild possible. So it'll be a bit like all of them to a full costing based on lost you for this year but still I mean it just keeps coming down to the economy goes badly I think it's gonna help the economy does well. So economy does well this year they'll full cost of that again next year but they still what have any idea. Most of us their knowledge that the economists are inaccurate it repeatedly inaccurate. Yet they have the ability to have a dramatic impact on our economy talked to explain. You know because these big big get a lot of of credit. The beer and listen to like that. The market trades on words that come out of gas fields now. So why how did they have such an impact on our global economy. Welcome it is that there. Big decisions that impact the market and impact the economy. People have to be made so given that we have. Central Bank. You know he asks that interest rates. So what it tries to do it tries to do that according to where it thinks the economy is going to come island don't just Janet Yellen both the whole of the times the but the senate get together and decide what happened to writes me a lot of different full costs and ultimately I can open to that. This is something that someone custom make a prediction. That is the problem is that. Not so much the predictions both. You know debate it. He can think about trying to decide on where interest rates should be. I expected that they should do it on the basis of some predictions and they just pick a number of how. But the ball they need to be ready to do is to change their minds quickly when things change. Because. The whole problem here is not so much you know thing 2.2 5% this year up. Mailed in a senate to be -- it needs mole that. He stated look it's going to be 2.2 flying in less specific tax cuts. If trump comes through with a great big tax cuts and it'll goes out and spend little more money penalties it'll be on that the economist at you might give them a bit more respect. It was a wolf I don't know off. To so due to some extent it's. Powerful. As the media and public media and indeed investors took thanks so much attention to the number. And less attention to what's really behind it dissident discussion that color around. Why is it going to be 2.2 5%. Do you have a favorite economist BWAY in once you you know we all have a dozen or so that we follow. Do you have one in particular that you find to be particularly. Accurate and poignant with there and analysis. And I like the political economists. The ones who mostly don't don't get too worked up about the precise numbers. And indeed there's a lot of that old saying well. You know we can't we be we have really can't walk the precise number is in my system option. But they tend to be people view along. Sort of a united. Have less time money to Wall Street and sort of made so people from workable treatment stepped back a bit. And is quite a few of those unlike that they tend to be once you don't give you very useful full cost per side because they don't think there's such thing as a pretty useful for. I think that's rather rather rub on it and I think should be. Gergen James thank you very much for your time. I. Is James mackintosh Wall Street Journal. You must day do you read much obliged flowers stuff chucked the is the data Dartmouth. These amount he was actually what am I use my statistics professor in college. And actually had to leave halfway through his term because he was taking a seat. At the Bank of England making monetary policy there are so. I'd Becky bubbles what he does a little bit but actually thought that my. Professor for financial markets have actually kept in touch with him much more he's he is written a number textbooks and so force. And very Smart guy. Who I have a paid a lot more attention to.