Monday, February 2, 2015
Herman believes that forecasters should predict recessions early and often: “… the cost of a recession is so great that a forecaster should never miss one … Some people argue that turning points are unpredictable. I disagree. I have never had trouble predicting recessions. In fact, I have predicted n+x of the last n recessions.”
Herman’s colleagues and friends organized a conference on his 80th birthday and the proceedings have just been published in a special issue of the International Journal of Forecasting. The conference versions of the papers are available here.
The issue has an article by Fred Joutz, Tara Sinclair and me, which summarizes Herman’s extraordinary career—the early work on forecasting turning points and why forecasters seem to miss nearly every one of them; the first forecasting assessments of the Fed’s Greenbook forecasts; and much more.
Forecasting is difficult and I honor the people who have to do it. My own interest in the topic was triggered by my awful forecasts for growth in the Asian crisis economies in 1997-98. I have continued my own “astonishing record of complete failure” by completely failing to forecast the recent sharp decline in oil prices. I did call the Patriots-Seahawks outcome correctly.
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