Economists in the Hot Seat for Missing Marks on Forecasts

Economists criticized for missing forecasts on inflation, supply chains, and predicting a recession that didn't happen. Covid-19 and geopolitical events made forecasting harder.

Central bank leaders like Christine Lagarde say economists need to get out of their comfort zone of models and spreadsheets.

Economists failed to anticipate post-Covid inflation and supply chain issues. Interest rate hikes used to combat inflation were not originally forecasted.

Forecasting models less reliable due to many hard-to-integrate factors like bottlenecks, labor shortages, geopolitics. Lacked imagination.

Economists fell to "last place" in trusted professions. Some central banks reviewing and updating forecasting processes in response.