Fuzzcharts: Who Predicted the Bush Recession?
Does Jerry Bowyer thinks macroeconomists have some crystal ball? I guess any suggestion that the recovery might get derailed has to be shot down by the Bush cheerleaders at the National Review but criticizing Greenspan for not predicting the 1990 and 2001 recessions is just stupid:
After all, if the former Maestro wasn’t able to call recessions when he was running a forecasting firm, we can hardly expect him to do so now. Reportedly, Townsend, Greenspan and Co. predicted only one of the many recessions that occurred between 1954 and 1987. But Greenspan’s record didn’t improve all that much during his two decades at the Fed.
Bowyer must have missed what Daniel Gross recently wrote:
Noting that while a recession in 2007 is possible, he elaborated: “I don’t think it’s probable.” But his comments — and the global reaction — raise a larger question: If a recession were imminent, would Mr. Greenspan, or any less august economist, be able to forecast it? The answer, based on recent experience, is a resounding no. “I don’t think we, as a profession, ever had an ability to forecast recessions,” said Jeffrey A. Frankel, professor of economics at the Kennedy School of Government at Harvard and a member of the National Bureau of Economic Research’s Business Cycle Dating Committee, the official arbiter of recessions. “It’s hard enough to know when a recession has started, looking at it with hindsight.” Indeed. No disrespect to Mr. Greenspan, but neither he nor the similarly numerate members of his professional fraternity have a particularly good record of forecasting recessions. The Economist reported that in March 2001 – the month the last recession began – 95 percent of American economists believed that there wouldn’t be a recession. In February 2001, the 35 professional forecasters surveyed by the Federal Reserve Bank of Philadelphia collectively predicted growth at an annual rate of 2.2 percent for the second quarter of 2001 and 3.3 percent for the third quarter. It’s as if meteorologists stood outside as the storm clouds approached and informed television viewers that endless sunshine was ahead.
Come to think of it – no one at the National Review was publishing a 2001 forecast that indicated that GDP would fall.