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| Version 3 | Version 4 |
|---|---|
| Treasury forecasts and the post-Brexit UK economy | Treasury forecasts and the post-Brexit UK economy |
| (5 days later) | |
| Letters | Letters |
| Thu 1 Feb 2018 18.32 GMT | Thu 1 Feb 2018 18.32 GMT |
| Last modified on Wed 14 Feb 2018 15.27 GMT | |
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| In a way Steve Baker is right (Backlash over minister’s claim that government forecasts are never right, 31 January), because it is nigh impossible to predict with precision a particular outcome in a world characterised by lots of unknowns. The Bank of England, among others, has long recognised this and provided a measure of uncertainty around its forecasts. In the case of Brexit, however, economic studies are not attempting to predict a final outcome but what will happen under different assumptions about the form of Brexit. The actual behaviour of the economy will not only reflect these assumptions but also other factors, such as growth in the US and other economies. | In a way Steve Baker is right (Backlash over minister’s claim that government forecasts are never right, 31 January), because it is nigh impossible to predict with precision a particular outcome in a world characterised by lots of unknowns. The Bank of England, among others, has long recognised this and provided a measure of uncertainty around its forecasts. In the case of Brexit, however, economic studies are not attempting to predict a final outcome but what will happen under different assumptions about the form of Brexit. The actual behaviour of the economy will not only reflect these assumptions but also other factors, such as growth in the US and other economies. |
| So it will not be possible to judge the quality of the economic analysis of Brexit from what actually happens in the economy. Actual growth in the future will be a mixture of Brexit- and non-Brexit-related influences. In order to evaluate the analysis of Brexit after the event it would be necessary to isolate the influence of the non-Brexit factors. In that sense, economic forecasts can neither be proved right nor wrong in terms of Brexit since any forecast errors might be put down to non-Brexit reasons. The importance of economic analysis of Brexit is in the assessed contribution of the Brexit effects to any future development of the UK economy. So after Brexit, only time and serious analysis can reveal whether the economic models were right or not.John Whitley(Former Bank of England forecaster) Lymington, Hampshire | So it will not be possible to judge the quality of the economic analysis of Brexit from what actually happens in the economy. Actual growth in the future will be a mixture of Brexit- and non-Brexit-related influences. In order to evaluate the analysis of Brexit after the event it would be necessary to isolate the influence of the non-Brexit factors. In that sense, economic forecasts can neither be proved right nor wrong in terms of Brexit since any forecast errors might be put down to non-Brexit reasons. The importance of economic analysis of Brexit is in the assessed contribution of the Brexit effects to any future development of the UK economy. So after Brexit, only time and serious analysis can reveal whether the economic models were right or not.John Whitley(Former Bank of England forecaster) Lymington, Hampshire |
| • Your leader (31 January) castigates Steve Baker for his cavalier attitude to Treasury forecasts on the consequences of Brexit. You may be equally criticised for your uncritical acceptance of these forecasts. | • Your leader (31 January) castigates Steve Baker for his cavalier attitude to Treasury forecasts on the consequences of Brexit. You may be equally criticised for your uncritical acceptance of these forecasts. |
| Economic forecasting is not a science – it is not based on well-established and empirically verified theory. Like you, I am in favour of staying in the EU, but this is no justification for accepting the Treasury forecasts as embodying the truth. As remarked by Gavyn Davies in 1997: “They [economists] should be humble considering how many times they get things wrong.” | Economic forecasting is not a science – it is not based on well-established and empirically verified theory. Like you, I am in favour of staying in the EU, but this is no justification for accepting the Treasury forecasts as embodying the truth. As remarked by Gavyn Davies in 1997: “They [economists] should be humble considering how many times they get things wrong.” |
| Mr Baker repeated Ezra Solomon’s 1985 quip “the only function of economists is to make astrology respectable” (wrongly attributing it to John Kenneth Galbraith). Economists should be aware of the fate of the astrologers Hsi and Ho who, according to Chinese legend, were executed for failing to predict the solar eclipse of 22 October 2134BC.Ian W RoxburghEmeritus professor of astronomy and mathematics, Queen Mary University of London | Mr Baker repeated Ezra Solomon’s 1985 quip “the only function of economists is to make astrology respectable” (wrongly attributing it to John Kenneth Galbraith). Economists should be aware of the fate of the astrologers Hsi and Ho who, according to Chinese legend, were executed for failing to predict the solar eclipse of 22 October 2134BC.Ian W RoxburghEmeritus professor of astronomy and mathematics, Queen Mary University of London |
| • Join the debate – email guardian.letters@theguardian.com | • Join the debate – email guardian.letters@theguardian.com |
| • Read more Guardian letters – click here to visit gu.com/letters | • Read more Guardian letters – click here to visit gu.com/letters |
| Brexit | Brexit |
| Economics | Economics |
| Economic growth (GDP) | Economic growth (GDP) |
| European Union | European Union |
| Foreign policy | Foreign policy |
| letters | letters |
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