On 12/18/06, [EMAIL PROTECTED] <[EMAIL PROTECTED]> wrote:
>
> Michael Tobis wrote:
> > I'd be interested to know what the longest time scale is that
> > economists can generally agree on a prediction, compared to the time
> > constants of the system.
>
> Well in one sense it depends on the prediction. A prediction that in
> one hundred years a combination of sin taxes and carbon trading will be
> a cheaper way to reduce emmissions than a raft of subsidies and fines.
We are certainly in agreement on this point. In fact, I don't think
it's controversial; it has a sort of straw man feeling to it.
> This is a long term prediction economists are very confident in.
Good; so contrary to your previous posting you seem to accept that
long range predictions beyond the span of a career are possible.
> Even
> though it is conceivable many facets of economic theory will change,
> some things that were discovered at the inception of economic theory
> are still valid today.
Hmm; this is an odd turn of phrase to a physicist. Imagine saying
something like that about physics.
> I don't think this is what you are talking about
> however. Predictions of economies based on demographic change ought to
> be very useful for long range forecasts.
Analogous claims can be made for climate physics; indeed the time of
applicability may in principle be very much longer both because the
system is better understood and because it operates on longer time
scales. So what is the substance of your complaint?
I picked up an end-of-year copy of Business Week yesterday, and it
polled some experts on the economic prognosis for the next year. The
variety of expectations was astounding. For instance, the predicted
value of the Dow at the end of 2007 across several dozen experts
ranged smoothly from 10400 to 14400 (or something on that order). This
is a one-year uncertainty in the market value of twenty huge
corporations chosen to be representative of the corporate sector of
20%, not in rate of change but in absolute value!
It is as if climatologists could not agree on the global mean
temperature in a year's time to within +/- 60 degrees Kelvin (108 F).
In fact, such a coarse prediction of the earth's mean surface
temperature is possible with very high confidence over tens of
millions of years at least.
mt
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