An Economist Looks At the 80's
Richard T. Selden
At the start of a new decade it has become traditional for assorted "prophets" to emerge from the woodwork with Delphic visions of things to come. These exercises in futurology are not totally worthless. At the very least they may have entertainment value, especially when read retrospectively. Beyond that, they provide an occasion for examining the past since, in the final analysis, forecasts consist largely of extrapolations of recent trends. A postmortem on the period just completed may, in fact, be more interesting than speculations about the period ahead. On the assumption that we are clever enough to identify past policy errors, we should be able to avoid similar mistakes in the future.
This essay begins with a brief description of the state of the U.S. economy ten years ago. It then reviews some representative forecasts for the 1970's and compares them with actual events. I exhume these long-forgotten relics not to ridicule their authors, all of whom are respected economists, but rather to evoke the prevailing mood as the seventies began. Equally important, one should stress the substantial fallibility of economists as long-range forecasters. I perform this review despite uneasiness that some future critic may do a similar job on the present piece a decade hence!
