Saturday, 31 January 2009

Our wonderful Central Bank

I see our Central Bank, in its latest Economic Review, informs us that GNP will decline by 4.75% this year.

Wow - that's impressive. Economic forecasting to two decimal places.

But wait! Can this be the same CB that only a few months ago told us we'd have actual economic growth in 2009? Let me see... why yes, the very same one. Quite a change. And the next Economic Review will reveal further change, as, ever behind the curve, it'll dawn on them that the decline will be a lot greater than 4.75%. Something like 7.294%.

Which forces me to ask, why do we have a plethora of bodies drawing up these economic forecasts, each pretty much the same and all wildly wrong? Just off the top of my head I can think of the CB, ESRI, ICTU, Fas, Dept. of Finance plus all the banks and brokerages.

As a recovering economist (scary confession) I can tell you that most economic forecasting is useless, often driven by vested interests (e.g. the banks and brokers telling us everything is just fine) and lent a spurious sense of authenticity by use of ample decimal places.

Ignore those emanating from the vested interests and close down those funded by the taxpayer. And in conclulsion, close down the CB as well. It ceased to have any relevance once we joined the Euro zone


cyclops said...

What about the old joke of joining all economists head to toe they will never reach a conclusion?

Anonymous said...

You're right. We have no need for the CB for managing our currency, and it totally failed in its oversight role of the banking system, which was supposed to have been done by the Regulator anyway.

clonycavan said...

You are right. That's a shadow central bank in case the Euro goes belly-up.

Anonymous said...

clonycavan - i presume you mean that we'd be better off out of the Euro Zone? If so I'm with you there.