Tuesday, November 17, 2015

"There is no better illustration of the pitfalls of a good story than economics."

The story trap

We use neat stories to explain everything from sports matches to symphonies. Is it time to leave the nursery of the mind?

by Philip Ball
"There is no better illustration of the pitfalls of a good story than economics. The shortcomings of this discipline as a predictive or even explanatory science have been well advertised, but one rarely acknowledged reason for those failures is the penchant of analysts to mistake narrative for causal understanding. How often do we see charts of fluctuations in, say, share prices or economic indices decorated with arrows indicating the political or financial events that ‘caused’ them? Even when these are not transparently spurious, with spikes that are evidently mere noise commandeered to serve a story, the narrative is often an empty posture of omniscience."

1 comment:

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