Other than the weather, economic projections are probably the most common prediction seen in the mainstream media. And, like the weather, they are generally wrong. The IMF puts out its World Economic Outlook twice a year -- once in the spring and again in the autumn. A case study for the lack of utility in economic forecasts can be shown by considering how the IMF's predictions for real annual GDP growth in the United States have held up since 1999. The way to read this table is to take the year you are interested in on the vertical axis, and then move across the horizontal axis to see how the various annual IMF predictions have changed over time for the year in question. The diagonal of yellow shaded cells are the predictions for a particular year made in the autumn World Economic Outlook for that year. Overall, we see a bit of a coin toss in accuracy. Just look at the year 2000. In late 1999, the IMF predicted U.S. real GDP would grow 2.6 percent in 2000. Then, late...(Read Full Post)