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Getting some good out of the election

August 19th, 2010

It’s hard to say anything good about this election campaign, but it is a trivial problem compared to the disaster afflicting Pakistan. To get something good out of this horse-race, James Farrell has organized a tipping competition, with proceeds going to flood relief. Get over, make a prediction and pledge some money.

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  1. Chris Warren
    August 19th, 2010 at 17:31 | #1

    Is this legal?

    If you give money to a legal fund, you get a tax deduction.

    What is the situation here?

    Anyway it is not possible to make accurate (or reasonable) predictions in social sciences, and I will our economists would wake up to this fact.

  2. Chris Warren
    August 19th, 2010 at 17:33 | #2

    Where there is a will there is a wish,

  3. Jim Rose
    August 19th, 2010 at 18:27 | #3

    @Chris Warren
    You are correct when you say that “it is not possible to make accurate (or reasonable) predictions in social sciences, and I will our economists would wake up to this fact.”

    hayek is rather strong on social behaviour being a complex phenomena where our ability is limited to making pattern predictions only. Popper was a critic of forecasting as was keynes.

    The limitations of economic forecasting are well-known:

    • Forecasts are conditional on a number of variables; there are important unresolved analytical differences about the operation of the economy; and large uncertainties about the size and timing of responses to macroeconomic changes. Shocks to the output, prices, employment and other variables are partly permanent and partly transitory.

    • We have very little reliable information about the distribution of shocks or about how the distributions change over time. The same is true for the distribution of real and nominal shocks, of shocks to aggregate demand relative to aggregate supply and so on.

    • Forecast errors arise from changes in the parameters in the model; mis-specification of the model, estimation uncertainty, mis-measurement of the initial conditions and error accumulation.

    • Most early discussions argued against the forecasting in principle. Forecasting was not properly grounded in statistical theory, it presupposed that causation implies predictability and the forecast themselves were invalidated by the reactions of economic agents to them

    the possibility of late swings and the arbitrariness of results across single member seats in close elections make predictions about close elections very inaccurate.

  4. James Farrell
    August 19th, 2010 at 18:37 | #4

    Thanks very much, John.

    Readers should note that John himself has generously pledged to donate $50 for each correct prediction (that is, within five seats!), raising the total to $200 per prediction.

    If you don’t have time to visit Club Troppo, I’m sure John won’t mind if you drop your pledges and tips in this comment thread.

    I’ll tally them all up.

    I’m extending the deadline to Friday 9pm.

    No one has a predicted a Coalition victory so far, so there’s an opening there for anyone who cares to gamble on the fame and glory you would enjoy in the event of an Abbott victory.

  5. paul walter
    August 20th, 2010 at 22:26 | #5

    Or, plonk some money into oxfam, even..

  6. paul walter
    August 21st, 2010 at 01:09 | #6

    It looks opaque, the election. We have to make of it what we can.
    The closest election I can think of was late1960, I think. Menzies just survived and went on to see the foe crushed later. 93 Was an interesting one too. The first conscious refusal of the public for economic rationalism and neoliberalism.
    Keating botched the job of communicating what he was doing with the public and the next election saw Howard in on a swing as crushing as Rudd’s in 2007.
    If the Green vote holds up, we will have seen an even more significant change in a political horizon than with Britain, where the centreparty will eventually be chewed up the as the public polarises of something or other, then they will go the way of the Democrats, who still served this country well for twenty years.
    Because the coalition becomes a dry party, labor shifts to the centre and if labor botches things and causes polarisation, its future could be finite too.

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