The study, by the New Economics Foundation (NEF), a UK based independent think-tank, examines the accuracy and precision of projections made by both climate scientists and economists over the past 20 years.
First, the economists. The study looked at measures commonly used in long term UK government economic modelling and decision making, using 1995 as a baseline: the population forecast for England and the forecast for the UK Treasury’s debt to Gross Domestic Product (GDP) ratio.
In the US, the forecasts on oil prices over the period made by the US Energy Information Administration (EIA) were also examined.
The NEF finds the economists’ projections both inaccurate and imprecise in all three areas. The economists saw the population of England growing at a fairly modest level from 1995 to the present – from around 49 million 20 years ago to 51.5 million now.
In fact England’s population has risen steeply, particularly over the past 10 years and is now approaching 54 million. The UK Treasury’s forecasts on the GDP to forecasts on the debt to GDP ratio fared no better, displaying “a bias towards optimism in government economic forecasts” says the study.
Meanwhile the crystal ball gazing of economists at the EIA was a miserable failure: they predicted oil prices rising on a gentle curve in the 15 years 1995 to 2010. In fact prices have been extremely volatile, rising at some points by more than five times the predicted figure.
And of course, the most damning judgement of the financial boffins forecasting skills is the failure of nearly all economic pundits to predict the 2008 recession.
Contrast this with predictions made by climate scientists over the past 20 years, in particular those made by the Intergovernmental Panel on Climate Change (IPCC).
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Via Chuck Sherwood, Senior Associate, TeleDimensions, Inc