What Do We Do Now?
The saying goes that economists have been put on this earth to make weather forecasters look brilliant. That may be true, but economics does provide the framework for looking into the future, even if the future is foggy. While you would never want to bet the bank on an economist's forecast, you would never want to bet the bank without one. Of course, it is probably never good to bet the bank on anything, but households and businesses do it every day, though maybe in a smaller way. They make retirement plans, put into motion long-term business plans, or make major capital investments—be it a house or a new plant—that depend on certain circumstances holding true. The simple fact, though, is that conditions change and recognizing they can and do change is the key to success. In this chapter, we discuss some of those potential trends.
“The Future Ain't What It Used to Be”
It is hard to believe that one of the most important economists of the twentieth century was former Yankee star and Hall of Famer Yogi Berra. Of course, like every famous quote, there is a question about who first said it. Regardless, Yogi made the comment “the future ain't what it used to be” famous, and that sentence completely sums up the whole concept of looking at the world and the economy through the lens of context.
Context makes us consider whether the current “common knowledge” makes any sense. It requires us to factor in not just what has happened but what may happen in the ...