Enough With the Economic Doomsaying

The U.S. economy grew at a robust 2.8% in the second quarter , far faster than economists’ predictions of just 2% . The miss is reminiscent of a long losing streak for doomsaying about the economy.

John Maynard Keynes warned that economics was “not homogenous through time” the way we can assume the physical world to be.

How could a recession be predicted with any degree of reliability?.

In 1974 , Austrian - British economist Friedrich August von Hayek won the Nobel prize in economics .

Hayek urged the Nobel committee to require an “oath of humility” from economics laureates.

Instead of adopting an oath of humility, economics has churned out generations of model-wielding academics and policy wonks.

When inflation was 9.1% the choice was presented as either a runaway wage-price spiral, a deep recession with high unemployment, or even both: stagflation.

But now we’ve had the longest stretch of unemployment below 4% in over 50 years and inflation is back within eyesight of the policy target.

For every true crisis, there are many false alarms, but there is little appetite for holding doomsayers accountable.

The practitioners and users of economics must—and can—do better.