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As if nothing drastic had happened, at the turn of the year supposedly experts come over and over again with economic forecasts for the coming times.
What an overestimation of one's own capabilities is partly reflected there!
Of course, anything and everything can be predicted.
But never before in the past few decades has the foundation of the forecasts been weaker and so much remains so uncertain, uncertain and unknown.
Many statements are therefore based on mere assumptions - often without substantive evidence.
Some are more like horoscopes and are closer to fakes and far removed from actual facts.
It is neither malicious nor arrogant to state that the forecast quality is currently poor.
Nobody even remotely saw (could!) What caused Corona.
Likewise, nobody knew or knows how long the pandemic and, above all, how to fight it will keep the world in suspense and what the consequences will be for politics, society and the economy.
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Criticism and judgment on the forecast quality are not aimed at people at all - not even at expert councils or economic research institutes.
Much more fundamentally, they have their sights on methods and procedures with which predictions can be made.
All common forecasts are based on an extrapolation of the past - i.e. a transfer of historical experience and knowledge into the future.
This works reasonably well as long as the past remains at least as a rough approximation for the future - i.e. there is a certain stability of the political, social and economic structures.
This requirement was met for a long time.
As long as economic or social change takes place slowly, continuously and without breaks or sudden changes in direction, the past, present and future differ only slightly.
So many developments could be updated with high reliability from year to year.
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But what if the change happens extremely quickly, spares nothing or anyone and changes everything overnight - as was the case with the pandemic in 2020?
Then empirical values are not a good compass.
Rather, it requires a complete reorientation.
It is by far not only the coronavirus and its fight that are responsible for abrupt breaks.
Long before the outbreak of the pandemic, digitalization and the data economy began to undermine old principles with new technologies.
Uncertainty in a scientific guise
Corona and the changes it causes are only accelerating the pace of structural economic, social and demographic change - for example to home office, online trading, video conferencing, distance learning and electronic data collection, processing and distribution.
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The pandemic should actually open the eyes of forecasters too.
It would then be possible to see that the past is less and less able to provide meaningful and useful knowledge for the future.
Too much changes too quickly and too comprehensively.
Accordingly, future adjustments to new conditions cannot be derived from known development patterns from earlier times.
Even the most complex methods and models of bygone times are not really able to shed light on the digitized data economy of the post-Corona years.
They merely cover up in a scientific guise how immense ignorance, uncertainty and insecurity are.
Direct and indirect pandemic damage for those affected, their relatives, employers and employees and the population as a whole can only be roughly guessed at.
The consequences of the “whatever it takes” mentality of fiscal and monetary policy remain largely hidden.
Comparison with the 1920s
Nobody knows how the behavior of people and societies will change if, as before, millions and billions, but trillions of euros become the measure of all monetary things, when politics takes command of the market economy and the central banks override the interest mechanism.
The chutzpah with which supposed experts degrade all others to laypeople is shaken, in order to then predict the future course of the world economy to the point after the decimal point with unshakable self-confidence.
In the future, many things will be so different that even specialists simply have no experience, no knowledge and therefore no prior knowledge in order to be able to reliably assess what all the changes are for business models, sales and costs, for employment and income, family life and social cohesion mean.
In order to be able to make a prediction despite all the uncertainty, many forecasters like to use history.
Historical events are dug out of the memory box of days long past.
For example, many compare the 2020s with the 1920s.
Forecasters poke around in the fog
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What fits in anecdotal evidence is then presented as evidence for future developments.
However, (too) often it remains hidden and forgotten how many economies and societies have changed completely differently than certain individual cases.
To derive generalizable developments for the 21st century from the history of the 20th century and to prognosticate them goes beyond any scientific dimension.
Yes, history helps to understand what was.
One can see patterns and lessons from history.
But she is less and less able to predict what will be.
Therefore a naive belief in history leads to false prognoses.
Certain past behaviors may repeat themselves in the future - but by no means all.
Thus, practical answers from yesterday do not provide successful solutions for tomorrow.
Too often the knowledge gained from history is overestimated.
Too often it is instrumentalized and sometimes abused by interest groups in order to justify one's own actions by referring to apparent laws of the past.
History does not repeat itself.
The past is not a precursor to the future.
It does not provide any useful guidance for knowing where the journey will go.
That is why old wisdom is of no help.
They lead astray.
In the future, many relationships will run completely differently than they used to be.
Previously valid findings and causalities (i.e. generally valid if-then relationships) can be transferred less and less to the coming years.
But with this, more and more predictions turn out to be pure speculation.
Forecasters are increasingly only poking around in the fog of uncertainty and uncertainty.
So no hope for a reliable annual outlook for 2021?
But!
But at the turn of the times in a post-corona epoch of digitization and the data economy, there is also a change in ideology: away from a naive quantitative belief in numbers and towards a qualitative assessment.
New times require new forecasting methods more than ever.
What is needed is a longer-term foresight of what might be than a short-term forecast of what will be.
More humility and less overconfidence should allow the forecast pendulum to swing back from the fakes to the facts.
Sometimes no prognosis is the best prognosis.
"The third quarter was rather the exception"
Economic output in Germany grew faster than expected in the third quarter after the corona-related crash.
DIW President Marcel Fratzscher assumes, however, that the stricter measures will lead to a slump again in the fourth quarter.
Source: WORLD