Intuition, not prediction

There is a difference between an estimate, a projection, and a forecast. Projections extrapolate on past trends. Forecasts are based on an economic model that uses data to forecast future economic magnitudes.   The Covid crisis makes “data driven” projections inaccurate, as the past provides zero guidance for the future. Traditional forecasting models have to be reshaped to account for the simultaneous supply-demand shock of Covid. Most gross domestic product (GDP) predictions are, therefore, estimates —best guess predictions.   Estimates use high-frequency data.....

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