Spain does not sink : The fiasco of the economists

A month until the end of 2017 and Spain does not sink


In April 2016 the economist Juan Ignacio Crespo published a book that caught the attention of his scandalous headline: Why in 2017 we will go into recession again. It was not only scandalous, it was risky. And if it does not work?Spain does not sink

The publisher Planeta opted for the book, which became a small sales success in the country where pessimists and catastrophists occupy more covers of newspapers and television minutes. The news broke a record of visits because it reached more than 200,000 readings in a few days.

Crespo was not alone in his pessimism, because another economist named Santiago Niño Becerra, from his Twitter profile, proclaimed the collapse of the Spanish economy due to certain worrying signs: we tend to the economic oligopoly and the public debt is already unsustainable.

Well: there is one month left until the end of the year and the Spanish economy has not yet collapsed.

It seems rather the opposite. The forecasts have even been improved. The European Commission affirmed at the beginning of November that it increased its calculation of economic growth in Spain from 2.8% to 3.1%. Moreover, in 2018, Brussels is more optimistic than the Government because it speaks of a growth of 2.5% while the government reduces it to 2.1%. It is predicted one of the best Christmases in the history of Spain, with the consumption skyrocketing and stores hiring hundreds of thousands of people to satisfy customers.

So, why do some economists insist on ruining the party?

The problem with making any kind of prediction is that nobody can calculate all the variables that intervene in the development of the facts. Not even people who spend all day analyzing the markets, are able to always guess right.

The mentioned economists threw themselves into the pool making very specific predictions about this year. Specifically, Crespo said in his book that “the study services of the big world banks are already beginning to perceive clear signs of the next recession.” There were terrible signs like “the exchange rates of the main currencies, the main stock exchanges of the world, the foreseeable duration of the recession and the exit routes”.

Other experts and economists in other parts of the world announced Armageddon due to the arrival of Donald Trump to the White House. And they also failed. The American economy continues to create hundreds of thousands of jobs: unemployment is 4.3%, its lowest rate in 16 years. The price of homes has recovered what it lost in 2008. The Dow Jones index is 4,000 points above its level when Trump became president.

The newspaper The Wall Street Journal published a few days ago an article entitled “the predictions of 2017: pathetically wrong”. There he criticized all those who predicted that in 2017 the geopolitical instability unleashed by Trump would punish the stock market. It has been the opposite.

Why do catastrophists have more echo than optimists? Because news and catastrophic books tend to attract more interest from readers. The American essayist Jonathan Gottschald states in his book The storytelling animal, that human beings like stories full of problems, and that’s why bad news triumphs over good news.

What is clear is that half of the economists are right, and the other half are wrong.

Some will say that the year 2018 will be catastrophic. Others will say that it will be a magnificent year. In a year we will know who is right, and only then will we point out those who were wrong.

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