The British economy seems to be doing rather well at the moment. Employment, share prices, actual and predicted growth are all positive. This is the opposite of what we were being told this time last year when the referendum campaign was beginning to heat up.
The IMF said if Britain left the EU, the country would be plunged into recession, GDP would fall by 5.5%, house prices would fall, stock prices would crash, and the pound would tumble in value against other major world currencies.
Interviewed on TV last week an economist working for a city firm was asked why this hasn't happened. The response was in two parts - first the pound has fallen in value and second the rest would happen in time - we just needed to wait a bit longer.
In short, the predictions were correct. As answers go this is a touch arrogant and yet at the same time a typical response from an expert who does not like to admit they may be wrong. Forecasters, and economists are not the only ones who fall into this trap and have a number of rationalisations to explain why their predictions have not materialised. Psychologist Philip Tetlock identified five such rationalisations:
1. It just hasn't happened yet. As used by the Economist on TV last week. The predictions are in fact correct, so be patient and wait for events to unfold just as forecasted.
2. It is almost right. Whilst the prediction was not correct in its totality, it was mostly right. The economist last week drew attention to the one element that had been predicted correctly, the pound falling as proof of the validity of the forecast.
3. Something else occurred which meant the forecast was less valid. Otherwise known as the Ceteris paribus defence. It is somewhat ironic when a forecaster states in effect "in making my predictions, there are other factors that I did not anticipate".
4. If only... Here we find a forecaster moaning about the fact that their advice has not been followed. "If only they had done what I said, my predictions would have been accurate." In other words it is someone else's fault.
5. Everybody gets it wrong sometimes, but my model and process of analysis is still fantastic. You should continue to believe in me and listen to my predictions of the future. The least used rationalisation as it involves putting your hand up and saying you were wrong. With a caveat that the process is still right.
Rationalisations like these, whilst they may bolster one's ego, mean people are less likely to learn from their mistakes. Too often we let experts off the hook with their predictions, so stay alert for these excuses and then decide whether the predictions are worth listening to or not. It is no coincidence that the experts who we complain about the most are also the ones who have worked hardest at their analysis.
For example weather forecasters, their predictions are being made for the very short term so we can check their accuracy easily and quickly. Making other experts as accountable as weather forecasters will certainly keep them on their toes. There are lessons for all of us here too. Whenever we make a prediction and get it wrong do we forgive ourselves a little too easily? I can certainly think of occasions when I have been guilty of this.
Perhaps the only safe method is that adopted by Wayne Rooney "I don't make predictions. And I never will".Suggest a correction