I found this story in yesterday’s WSJ rather amusing. The point of the story is summarized in the following table:
What conclusions do I draw from this? First, economists often do no better than anyone else when it comes to predicting the impact of exogenous events on the economy. Second, most economists are pretty good at admitting they were wrong and revising their predictions ex post, in the face of evidence that their previous guesses were probably wrong.
For whatever reason, lots of economists feel that they’ve learned something about the resilience of the US economy to high oil prices over the past year. Maybe they’re right… or maybe we just haven’t waited long enough to really tell.