"The Folly of Forecasting"

Courtesy of Art DeVany, a DrKW analyst's sharply critical review of economic and financial forecasting (.pdf file). Two good bits:

Lao Tsu observed, "Those who have knowledge don't predict. Those who predict don't have knowledge."

"Economists are really very good at telling you what just happened! They constantly seem to lag reality. Inflation forecasts appear to be largely a function of past inflation rates."

Also see the research summarized by HedgeFundGuy:

The very method by which one becomes an expert explains why experts are much better at describing, explaining, performing tasks, and problem-solving within their domains than are novices, but, with a few exceptions, are worse at forecasting than actuarial tables based on historical, statistical models.