In economics, prediction is hard, especially about the future. So let's lower the bar and just try to predict the present. That's harder than it sounds, since metrics such as unemployment, inflation and gdp are reported with a lag of weeks or months. As a result, we don't really know where we are now. Before we can forecast the future, we have to nowcast the present. Take gdp. In America, this measure of economic activity is reported quarterly, with a one-month lag. But gdp figures are then revised twice months after this first report. The average growth rate since 1975 was 2.8%, but the average initial revision was about 0.54 percentage points. Economists often have to work with data that are both inaccurate and out of date.
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