I find it really hard to even comment on economic data on this blog. It’s based on so many assumptions and there are so many different numbers that can be included or excluded that critiquing it is a combination of trying to shoot fish in a barrel and trying to catch a greased pig.
Not my idea of a good time.
Anyway, BD Keller linked to an excellent post today that is way more articulate than I about why evidence based monetary policy is so hard to come by.
On economic experimental models:
Think of a good experimental design: randomised control variables, holding everything else constant, etc. Now think of the worst possible experimental design. Imagine something that engineers or psychologists might dream up over beers for a laugh, or to illustrate what not to do. That’s what economists face. It’s as if our lab assistants (the fiscal and monetary authorities) were deliberately trying to make our (economists’) lives as hard as possible. They do this, of course, not to spite us, but to try to make everyone else’s lives as easy as possible. To get a good experimental design for economists, both the fiscal and monetary authorities would need to be malevolent.
Makes sense, but given this, I do wish they’d stop saying their predictions with such authority.