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Nouriel Roubini; Fooled by Randomness; Economists; Epistemic Humility

Nouriel Roubini is an economist famous for predicting the current market downturn.  Because of his accurate predictions, everyone is swinging from his sack.  Should we, though?There are thousands of economists in this country.  Many of them have made predictions.  Many of them made predictions about whether or not we were in a housing bubble; and whether or not the bursting of the bubble would cause a recession.  Let's say there were 100 economists opining on this issue.  As a matter of chance alone, wouldn't we expect at least one person to have made mostly accurate predictions?Are we, Nassim Nicholas Taleb might say, being fooled by randomness: Are we seeing a causal connection where none exists?  Are we seeing a prophet where instead we should see a dice player?Also, what is a prediction, exactly?  For years Roubini has claimed that were were one step away from a recession...continue to full post

Full post as published by Crime & Federalism on October 27, 2008 (boomark / email).