Brexit
and the financial crisis have presented the economics profession with its
“Michael Fish” moment, according to the Bank of England’s chief economist Andy
Haldane.
Just
as the TV weather forecaster in 1987 wrongly dismissed claims that Britain was
facing a hurricane, noting instead that there would be high winds in Spain, so
economists failed to see the full scale of the financial crisis until it was far
too late - and since then have struggled to get their forecasts right.
“It
is very similar to the sort of reports central banks issued pre-crisis, that
there is no hurricane coming but it might be very windy in sub-prime,” Mr
Haldane told an audience at the Institute for Government.
Similarly
the Bank of England, along with other forecasters, was too gloomy when it came
to predicting an economic crash immediately after the Brexit
vote!
.jpg)
.jpeg)