The practice of economic development is like driving using only the side view mirrors – you can’t even see exactly where you’ve been, but you can see the edge of the path you’ve been taking. We try to guide ourselves forward with tools that are built for where we’ve been. Part of this rear-view navigation results from using a lot of tools that were developed to fix the problems of the past. But it is also because we have very little useful predictive information about the future. The majority of economic data is old. If we have any information about what happened even a month ago, it is somewhere between a guesstimate and an approximation of the actual conditions. By the time we manage to collect and verify the best information we can get, it is still incomplete and its shelf-life is expired. Despair.com makes a poster, “Economics: The science of explaining tomorrow why the predictions you made yesterday didn’t come true today.”
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