Via Mercatus Center at George Mason University – Projections Past and Future: Economic Imagination and the Financial Crisis 2007 – 2012, a new working paper from Cobden Centre Founding Fellow, Dr Anthony J Evans:
Whether or not economists could, or should, have predicted the financial crisis, there is an unprecedented urgency and demand for the profession to make itself a little more useful than it currently is. This working paper argues that economists have two main tools at their disposal, both of which are shockingly under-utilized. The first is counterfactual analysis – the ability to construct alternative histories to robustly assess what has transpired to be. The second is scenario building – the creation of alternative futures to interpret and respond to what is to come.
Download it here.