No Unified Theory Of Everything

No Unified Theory Of Everything

The "transitory" debate will heat up in the new week. Not that it's gone cold lately. An update on US consumer prices will likely show inflation ran at a 5% annual pace for a fourth month in August (figure below), testing the resolve of those inclined to stick to the script that says price pressures will prove ephemeral -- eventually. Of course, there's something wholly contradictory about the notion of a phenomenon "eventually" proving itself ephemeral. If something sticks around long enough
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2 thoughts on “No Unified Theory Of Everything

  1. There is a lot of churn in the labor market at the moment. And while many categories are seeing healthy wage increases, it is going to get harder to figure out where all this is going…

  2. A pressing concern, is to ponder if economic forecasting is substantially different than weather forecasting. No disrespect intended for anyone. Seemingly, the search for what lies ahead on the horizon will continue.

    Interestingly, Tasseomancy followed the trade routes of tea and coffee, and thus metaphorically, the evolution of economic forecasting follows an increasingly complex process of digesting chaotic patterns.

    This from NOAA:

    “A seven-day forecast can accurately predict the weather about 80 percent of the time and a five-day forecast can accurately predict the weather approximately 90 percent of the time. However, a 10-day—or longer—forecast is only right about half the time.”

    ==> From a 2 year old IMF report:

    “The report also found no evidence of “substantial positive or negative biases,” yet a more detailed look at the direction of forecast errors reveals how the fund has at times demonstrated a tendency to be too gloomy or too rosy for specific countries over the past 20 years. For instance, the IMF overestimated U.S. growth 80 percent of the time and China’s growth 20 percent of the time.”

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