Letter: Gloomy predictions show their worth

Professor Wynne Godley
Monday 19 October 1992 18:02 EDT
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Sir: According to Gavyn Davies ('Bend policy before economy snaps', 19 October):

Every single forecaster who has to produce a specific numerical view about the economy . . . has now been wrong- footed by this recession.

This is incorrect. Ever since I restarted fully articulated numerical forecasting at the end of 1990, my forecasts of the scale and persistence of the present recession have been broadly correct. For instance, writing in the New Statesman on 19 March 1991, I put the changes in gross domestic product between 1990-91 and 1991-92 at, respectively, -2.4 per cent and - 0.7 per cent. Admittedly, I was a bit over-pessimistic about unemployment, which I put at 3.3 million by the end of 1992.

That I made these forecasts, and that I was the only forecaster to predict output lower than a year earlier both in 1991 and 1992, can easily be verified by looking at the successive tabulations of forecasts published three times a year by the Financial Times.

Yours faithfully,

WYNNE GODLEY

Department of Applied Economics

University of Cambridge

Cambridge

19 October

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