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Inefficient markets

A bad time for pundits

By Edward Chancellor   February 2002

Bad year for forecasters

Like Christmas trees, economic forecasts should be discarded early in the new year. Anyone who retains a forecast too long will find it wilting more rapidly than an ageing spruce. At times of heightened economic uncertainty, such as we have recently been living through, forecasts have even shorter sell-by dates.

Forecasting errors for the last year were egregious. According to Consensus Economics, in December 2000 forecasters anticipated US growth of 3 per cent. As it turned out, the US economy went into recession some three months later and economic growth for 2001 will come in at…

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