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Saturday, 11 October 2014

Can Austrian Theory Help Financial Prediction?

By Peter St. Onge

A panel discussion at the 2014 Mises University addressed the question of whether Austrian economics can improve financial predictions.

We first want to distinguish between a colloquial meaning of prediction — improving the accuracy of one’s expectations — and the more rigorous sense of actually knowing the future. Austrians emphasize that the belief that one actually knows the future can be very dangerous, especially when central planners start to think their statistics and charts constitute crystal balls.

On the other hand, Austrian economists certainly predict in the more colloquial sense of improving accuracy of expectations. Indeed, Austrian economists even look both ways before crossing the street.

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