Abstract
“Economic predictions are notoriously unreliable”, wrote the Nobel laureate economist Amartya Sen in 1986. “It is, in fact, tempting to see the economist as the trapeze-performer who tends to miss the cross-bar, or as the jockey who keeps falling off his horse.” In October of the following year the stock market crashed on ‘Black Monday’ – and like all previous crashes, it came as a surprise to almost everyone.
The poor track record of economists in forecasting major shocks like this is now routinely cited as vindication of Thomas Carlyle’s famous (and usually misunderstood) characterization of economics as “the dismal science”. But this may be unfair. If ever there was a subject demonstrating how inappropriate it is to label the social sciences ‘soft’, it is economics. Unlike the ‘hard’ science of physics, whatever laws there might be that govern economic behaviour, they seem sure to be context-dependent, partial and inconstant over time.
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Ball, P. (2012). After the Crash: Economic and Financial Systems. In: Why Society is a Complex Matter. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-29000-8_7
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DOI: https://doi.org/10.1007/978-3-642-29000-8_7
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