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Given that we have data from the past for a time period (Just before, during and after an economic recession). Shouldn’t alot of people who work/track this information would see one coming or know we are on the brink of one or due in general just by looking at the numbers. If we know, shouldn’t we have corrective measures put in place to not let it happen ?
Is it just the scale that we can’t predict
Tldr – Why can’t economic downturn predictions/estimates get better since we have data from the past which helps understand things better ?
In: Economics
Short answer: chaos.
Some things are very predictable. Other things are very unpredictable. One great example of this is the pendulum. If you have a single pendulum, it’s really easy to predict exactly where it’s going to be for a long time. But if you have what’s called a double pendulum, where a second pendulum is hanging off the first one, tiny changes in the starting conditions can lead to huge changes further down the line. There’s a great gif of this somewhere. I’ll try and find it. Point is, economics it’s more like this. Even if you had almost perfect knowledge of the market, a tiny change could lead to a hugely different outcome.
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