Why Budgets are Dangerous
May 1, 2009
In the last week or so, the International Monetary Fund released another of its major economic outlook statements. Business and financial media all over the world earnestly pored over the numbers as if the future had been foretold by some all-knowing wizard. The strong sense was that, with this new-found certainty, decisions could finally be made.
Which would all be well and good except for one thing: the IMF is a false prophet.
Even a cursory review of the IMF’s fortune-telling performance reveals that their predications are, at best, a reasonable guess. IMF forecasts typically come close to the mark during relatively stable periods. But they nearly always fail to predict major economic adjustments which is, of course, when they would be most useful. Read the rest of this entry »
