Economic forecasts no better than a random walk

ABC News article,

Economic forecasts no better than a random walk

http://www.abc.net.au/news/2013-02-04/economic-forecasts-no-better-than-a-random-walk/4499098

"That paper found that 70 per cent of the RBA's forecasts for underlying inflation for the year ahead were close to the mark, but its predictions of economic growth were less accurate, and its unemployment rate estimates no better than a random walk."

Pretty much says what most of us would know, the forecasts are a bit suspect. Interesting that a couple of blokes took the time to do an internal analysis. Doesn't state how "close to the mark" close is? and wording is vague and wishy washy but still interesting.

Cheers
Graeme
 
“inflation for the year ahead” – I can simply say that it will be same as this year and I will be very close :)
Inflation is something RBA can influence/manipulate to keep at whatever they desire. Whereas all other economic factors are beyond their control.
 
what people need to realise is that the prominent school of economic thought today believes the markets are predominatly perception.. as a result its their job to manage your perception, not to tell you the truth.

hth
 
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