Irrational Exuberance of Economsts

Stephen Mihm’s article on Nouriel Roubini reported:

“A recent study looked at “consensus forecasts” (the predictions of large groups of economists) that were made in advance of 60 different national recessions that hit around the world in the ’90s: in 97 percent of the cases, the study found, the economists failed to predict the coming contraction a year in advance. On those rare occasions when economists did successfully predict recessions, they significantly underestimated the severity of the downturns. Worse, many of the economists failed to anticipate recessions that occurred as soon as two months later.”

Does anybody know the reference?

1 comment so far

  1. d on

    is this it?

    “He also links to this IMF paper* that shows that almost all private sector forecasters are useless in predicting recessions. Of the 60 recession episodes in the surveyed countries only two (Russia and Ukraine in 1996)were predicted in April the previous year, and only 3 of 60 were predicted by October the previous year.”


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