Thursday, 5 August 2010
The usefulness of macro
There is an interesting discussion going on over at TVHE in which Matt Nolan puts up a defence of macro forecasters, see here and here. Read the comments on both posts, especially those myself, of course!, and Eric Crampton. My basic position would be that macro can tell us that things are happening but explaining those things is in many cases a micro issue. I think the best defence Matt can put up is the "market defence". If someone is willing to pay for macro forecasts then they are showing that they think they add value. If they didn't think that, forecasters would go out of business.