The question of whether economics is an art or a science has been debated for discount code united pharmacy decades. Unlike physicists, who can predict an asteroid’s closest approach to earth within a http://cialistadalafils.com/ few miles when it is still 100 million miles out in space, economists can’t accurately predict this quarter’s GDP.
Yet quarter after quarter, month after month, economists, analysts, pundits, politicians and any other person with an Internet connection and a keyboard try to predict everything, with little success.
As much as people would love economics and investment management to be 100% certain, they aren’t.
Economists vs. Weathermen
A recent article in The Washington Post, titled “10 Reasons Why Economics Is an Art, Not a Science,” opens with a joke: “Why did God invent economists?”
Answer: “To make weatherman feel good about themselves”
I mean, really, have you ever thought about why weather stations update their seven-day forecasts every night? Shouldn’t this exercise only be conducted once a week?
People are afraid of uncertainty and gravitate towards those who seem assured. Just because math, models, equations and fancy algorithms are used in a practice doesn’t make it a science. As much as people would love economics and investment management to be 100% certain, they aren’t. We are in a business of probabilities, not certainties. Measuring reward given levels of risk and trying to stack the probability of success in your favor is the best anyone can do.
Barry Ritholtz, Chief Executive of FusionIQ, thinks economics is an art and not a science. Find out why here: “10 Reasons Economics Is an Art, Not a Science.”
What do you think?