Economics, astrology and 2012 predictions

December 30, 2011

As the usual end-of-year predictions roll in, perhaps the safest bet was captured this tweet from Bajaji Sridharan:

Since everyone is making predictions for 2012, here’s my prediction — 90%+ of all the 2012 predictions will be wrong.

It was another way of expressing a sentiment eloquently phrased by the late economist John Kenneth Galbraith – and frequently quoted by Dallas Fed President Richard Fisher – on the commonalities between economics and the stars. Galbraith wrote:

The only function of economic forecasting is to make astrology look respectable.

But there’s one thing everyone can be relieved about: it turns out the Mayans never predicted the world would end in 2012 after all.

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