One of the many tasks of the economist is to try and make predictions . Following the onset of the Global Financial Crisis in 2008 and subsequent economic collapse in many countries, the Economics profession came in for criticism.
Many questioned how such an event could happen and how economists generally failed to see it coming. Addressing the London School of Economics in November 2008 Queen Elizabeth II quizzed academics "If these things were so large, how come everyone missed them?"
One need only look at Ireland to see how inaccurate forecasts can be. As late as October 2008 the Department of Finance, ESRI, IMF and Central Bank were all predicting a contraction in economic activity of less than 1% of GDP the following year. By January 2009 this had risen to between 3.5% and 4%. The actually contraction was closer to 9%.
Should we beat ourselves up? Maybe not, making accurate predictions is hard and there is a substantial amount of uncertainty involved. We can draw an analogy here to Premier League predictions at the start of the season - a competition that could be considered a 'semi-closed' system and an environment where an outcome could be easier to predict. The table below is an abridged version of predictions from different individuals last August courtesy of The Guardian.