Summary: We depend on experts to tell us about the future, so that we can prepare for the threats it holds. But experts are fallible, and have the same incentives as all professionals to exaggerate their skills. What happens if events catch experts going too far beyond the state of the art? How might failed predictions public confidence in experts? This post considers two examples of scientists boldly putting their credibility to the test: economists and climate scientists, asking about one of the two possible outcomes.
Sometimes we can learn by asking a simple question as a thought-experiment:
“During this year in Aarau the question came to me: If one runs after a light wave with the speed of light, we would have a time-independent wave field in front of him. However, something like that does not seem to exist! This was the first child’s thought experiment that has to do with the special theory of relativity. ”
— From Einstein’s “Autobiographical Sketch” (1955)
Learning from Einstein, let’s ask a far simpler question. Below are two pictures that might shape our future, on two levels. First, they concern vitally important trends. Second, these are forecasts by highly respected institutions — both in different senses scientific institutions. What happens if they are wrong?
- Forecast of US economic growth (GDP)
- Forecast of global temperatures
Both mainstream economists and mainstream climate scientists are confident about the future despite the recent failure of their predictions. That does not discredit — let alone disprove — either science. It does suggest, however, the possibility that there are problems with their models. So what if events prove these forecasts wrong?
- Might we lose confidence in climate scientists and economists? That seems likely.
- Might we have less confidence in physical and social scientists? That seems possible.
- Might we place less value on expert opinion and more on ours and those we personally trust — no matter how little they know about the question under discussion? However unlikely, that would continue a trend already in motion — American’s distrust of experts — and probably have bitter consequences.
Let’s consider these in more detail.
(1) Good news about he US Economic Recovery
Mainstream economists expect that by 2016 the US economy will return to its post-WWII growth track, catching up after eight years of underperformance. As shown in this graph from the CBO report The Budget and Economic Outlook: Fiscal Years 2013 to February 2023, February 2013:
The CBO’s economists forecast of real GDP assumes 1.3% long-term growth in Total Factor Productivity, continuing the resurgence since 2000 (see this report for details). Are these forecasts realistic? Let’s hope so, because they are the basis for liberal economists’ confidence about the government’s solvency and ability to pay its Social Security and Medicare obligations (without high inflation).
Here’s what we can expect for GDP (the forecasts 2014 and 2015-2018 look ambitious):
- 2014: +3.4%
- 2015-2018: +3.6%
- 2019-2023: +2.3%
- 2023-2038: +2.0%
- 2023-2088: +2.2%
Might there be a structural problem with the CBO’s economic model (which is similar to those commonly used by most economists)? The next graph shows the CBO’s increasing overestimation of growth since 2000 (which narrowed slightly during 2005-2008, perhaps due to underestimation of the real estate bubble’s effects). This is from page 36 of their January 2013 self-assessment of their work through 2008 (commendable that they publish this). Results for 2008-2013 would show how the gap continued to widen.
This graph, and the other data in the report, disproves some common myths about the CBO’s work.
- They are not always too optimistic.
- Their forecasting ability is roughly similar to that of the Blue Chip Consensus forecasts.
- Their two year forecasts are quite accurate (roughly the limit given the current state-of-the-art and today’s data availability and quality).
See our future through the eyes of the CBO’s economists in these reports:
- CBO’s Economic Forecasting Record: 2013 Update, January 2013
- The Budget and Economic Outlook: Fiscal Years 2013 to February 2023, CBO, February 2013
- The 2013 Long-Term Budget Outlook, CBO, 17 September 2013
Posts about future growth of America:
- Has America grown old, and can no longer grow? Or are wonders like the singularity in our future?, 28 August 2012
- Is America on the road to zero growth?, 29 November 2012
- Why America’s growth is slowing, and a solution, 28 January 2013
- The US economy is slowing. Things might get exciting if this continues., 17 July 2013
(2) Global temperatures
This graph of the IPCC’s forecasts — past results and future projections — is from “How the IPCC’s projections match up“, Financial Times, 23 September 2013.
The causes and significance of the pause are subjects of intense research, on which basis climate scientists are estimating how long the pause might last. Some believe it will end soon. The longer estimates — a decade, perhaps even two — conflict with the dire predictions that have saturated the news media since 1998. A long pause might have a decisive effect on public opinion, dooming large-scale public policy programs to reduce climate change and mitigate its effects.
For more about these things see:
- One of the most important questions we face: when will the pause in global warming end?, 25 August 2013
- Possible political effects of the pause in global warming, 26 August 2013.
(3) For More Information
(4) Good news: scientists of the future will become better forecasters