Turning Point Versus Trend
The true test of the relevance of a macroeconomic theory is its capacity to generate a Depression, since market economies have regularly found themselves in such a state. (Hyman Minsky) Europe should be more open to the process of creative destruction. (Philipp Schindler, a vice-president at Google)
TURNING POINT VS TREND Volodymyr Ryaboshlyk ryaboshlyk@ukr.net Numerical forecasting of crises could become much more articulated if it were embedded in forecasting of innovative growth. This old qualitative idea now has got new quantitative interpretation and approval on thousands indicators of one of the EU countries. The transition path of whole economy to new technologies, starting from the old ones, must be traced more carefully, all structural shifts being taken into account. At that crises now and again arise as inevitable parts of these paths. And this is one of substantial causes of crises, which is still neglected. Just this provides forecasting of the U-turns, rather than mere extrapolations of trends. So such real innovative aspects should be added to regular analyses of different forecasting units to enforce traditional forecasts based on financial, behavioral and other aspects. At the beginning of the paper some shortcomings of the existing forecasting systems are demonstrated on examples of products of the EU forecasting service and of the Macroeconomic Prospect Team of the Treasury of the UK. And apart of it the smoothed lines of Nobel Prize winner of 2010 Professor Pissarides are considered in comparison with clear forecasts of turning points received by the author on the same time series. Then a description of forecasting of the recession of the early 1990s in the UK is given, as a part of forecasting of innovative growth. It is underlined that statistics must show explicitly ‘the height of technological leap’ and provide separate parameters of old and new technologies.
TURNING POINT VS TREND Volodymyr Ryaboshlyk ryaboshlyk@ukr.net Numerical forecasting of crises could become much more articulated if it were embedded in forecasting of innovative growth. This old qualitative idea now has got new quantitative interpretation and approval on thousands indicators of one of the EU countries. The transition path of whole economy to new technologies, starting from the old ones, must be traced more carefully, all structural shifts being taken into account. At that crises now and again arise as inevitable parts of these paths. And this is one of substantial causes of crises, which is still neglected. Just this provides forecasting of the U-turns, rather than mere extrapolations of trends. So such real innovative aspects should be added to regular analyses of different forecasting units to enforce traditional forecasts based on financial, behavioral and other aspects. At the beginning of the paper some shortcomings of the existing forecasting systems are demonstrated on examples of products of the EU forecasting service and of the Macroeconomic Prospect Team of the Treasury of the UK. And apart of it the smoothed lines of Nobel Prize winner of 2010 Professor Pissarides are considered in comparison with clear forecasts of turning points received by the author on the same time series. Then a description of forecasting of the recession of the early 1990s in the UK is given, as a part of forecasting of innovative growth. It is underlined that statistics must show explicitly ‘the height of technological leap’ and provide separate parameters of old and new technologies.
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