Quote of the day: On prediction

It is not that I am somehow against prediction. I think that if forty years of econometrics has revealed anything of value to us it is that you cannot very often make successful predictions of the sort that economists seek. Despite the claims of some econometricians, most results they achieve are pretty useless. Anyone can run millions of regressions with a set of data and report a result that seems to pass all tests—though the fact that millions of regressions are run means that most of the conditions of the tests are violated. But even with such results we find that as soon as new data come along the previously reported results or models typically break-down. What I am saying is that no matter how interested in successful prediction some economists may be, this interest does not make it feasible.

- Tony Lawson, Faculty of Economics at Cambridge University in Erasmus Journal for Philosophy and Economics, Volume 2, Issue 1, Summer 2009.

A New Economics Association

"The World Economics Association (WEA) was launched on May 16, 2011. Impetus comes from the embarrassment that is felt within the economics profession for its dismal showing regarding the Global Financial Collapse, and the absence in this global age of a truly international and inclusive association of economists."

An interesting development. What will characterize this organisation? The manifesto tells a lot:

"Manifesto

The World Economics Association (WEA) seeks to increase the relevance, breadth and depth of economic thought. Its key qualities are worldwide membership and governance, and inclusiveness with respect to: (a) the variety of theoretical perspectives; (b) the range of human activities and issues which fall within the broad domain of economics; and (c) the study of the world’s diverse economies.

The Association’s activities will centre on the development, promotion and diffusion of economic research and knowledge and on illuminating their social character. To achieve these aims the Association constitutes itself as a new form of worldwide, democratic, and pluralist organization with the following commitments:

1. To plurality. The Association will encourage the free exploration of economic reality from any perspective that adds to the sum of our understanding. To this end it advocates plurality of thought, method and philosophy.
2. To competence. The Association accepts the public perception that competence levels in segments of the economics profession were found wanting by recent events. So as to better serve society in the future, the Association will encourage critical thought, development of new ideas, empirically based rigor and higher standards of scholarship.
3. To reality and relevance. The Association will promote economics’ engagement with the real world so as to confront, explain, and make tractable economic phenomena. In this context it will also encourage economics to give active consideration to its history, its methodology, its philosophy and its ethics.
4. To diversity. Both the membership and governance of the Association are specifically constituted in order to embrace all forms of diversity within its membership.
5. To openness. The Association intends to ensure that all its processes of publication, discussion, meeting and association are transparent and open to input from all its members. To this end the WEA will constitute itself on the internet and use digital technologies wherever possible, including online conferencing and virtual publication.
6. To outreach. The Association recognizes the valuable contributions to economic thought that are made by researchers and thinkers outside the main body of economics. The WEA will encourage such people to become members and add their insights to our collective learning.
7. To ethical conduct. The Association will establish a committee to draw up a code of ethics.
8. To global democracy. The Association will be democratically structured so as not to allow its domination by one country or one continent.

The association believes that these commitments, when held in common by its members, will increase the relevance, breadth and depth of economic thought, so that in the future the economics profession and associated professions will be better equipped to serve humankind"

Plural, diverse, real-world, open, ethical.

Two observations: (1) Many of the same key words as the World Social Forum. (2) Association needs to ensure that plurality does not take the form of 'anything goes'.

For now, I have signed up.