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Thursday, March 28, 2024

Why Economists Are Such Horrible Forecasters

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

The answer, as shown in the following charts from the IMF, is because the dotted “consensus” blue lines also known as simple trendline extrapolation, better known in the financial world as “Birinyi’s ruler”, sometimes just happen to diverge from reality.

And when the divergence between the blue dotted line and reality becomes great enough, economisseds blame the weather, the timing of Easter, and generally any “glitches” in reality for refusing to comply with trendline-extrapolating models.

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