Regardless of how challenging, we are required to engage constantly in making economic predictions. My boss asks me to do a what I view as a stupid task because (a) I do not perceive the utility or (b) I predict, based upon previous experience, that my boss will, in fact, make no use of my output; and performing this task will occupy time that I believe could be spent more productively. How I respond, whether and how conscientiously I perform this task, requires several economic decisions that are as important to me personally as whether the Federal Reserve decides to increase the fed fund rate. My action will be based upon predictions such as the downside if I don’t do it or do a shoddy job; my future with the company; how others perceive my future in the company, how others perceive my boss, my prospects for employment with a different company, …. Many challenging assessments and predictions to make in a short period of time.
If I understand you correctly, Mass-Driver, I agree with you. I believe that competent, risk-based decision analysis is possible and when we employ such analysis, we make less disastrous economic decisions for ourselves and others.
My example is local, or personal if you will, to avoid political controversy. As a general matter, I believe that everything one does or does not do will have a consequence that is, in its totality, both unpredictable and unknowable. Nevertheless, we have to make plans based upon the best predictions of which we are capable.
Responding to the idea of economic predictions:
Regardless of how challenging, we are required to engage constantly in making economic predictions. My boss asks me to do a what I view as a stupid task because (a) I do not perceive the utility or (b) I predict, based upon previous experience, that my boss will, in fact, make no use of my output; and performing this task will occupy time that I believe could be spent more productively. How I respond, whether and how conscientiously I perform this task, requires several economic decisions that are as important to me personally as whether the Federal Reserve decides to increase the fed fund rate. My action will be based upon predictions such as the downside if I don’t do it or do a shoddy job; my future with the company; how others perceive my future in the company, how others perceive my boss, my prospects for employment with a different company, …. Many challenging assessments and predictions to make in a short period of time.
If I understand you correctly, Mass-Driver, I agree with you. I believe that competent, risk-based decision analysis is possible and when we employ such analysis, we make less disastrous economic decisions for ourselves and others.
That’s not the sort of planning and prediction that gwern thinks is doomed, since it’s “local.”
My example is local, or personal if you will, to avoid political controversy. As a general matter, I believe that everything one does or does not do will have a consequence that is, in its totality, both unpredictable and unknowable. Nevertheless, we have to make plans based upon the best predictions of which we are capable.