The Uncertainty Which Surrounds ‘Uncertainty’

Posted on by

We live, as they say, in an uncertain world. But recently, if you have been noticing, in the economic sphere references to the high levels of uncertainty attached to any forecast have been coming fast and furious. And this warning needs to be taken seriously. The data is very ‘volatile’. Only today there is news that the Japanese recovery may well not be as strong as anticpated. And now we find that:

French industrial production fell by the most in more than six years in October as car sales slumped, suggesting a pickup in Europe’s third-largest economy may lose momentum.

Nothing especially surprising here, and nothing to read to much into, except that we should not be too confident that the eurozone has all the momentum it is claimed to have. Dave Altig at MacroBlog posted yesterday about how some ECB governing council members still think more interest rate rises are a good thing., and the FT states today that “fresh signs of eurozone economic activity picking up emerged on Thursday”. Well that was Thursday, and this is Friday, and it would be a brave man (which I am not) who said that there were fresh signs of economic activity slowing down today. But do remember this: oil is sticking around 60$ a barrell, interest rates are rising (slightly), and Germany’s economy is export and not domestic driven.

This entry was posted in A Few Euros More, Economics and tagged by Edward Hugh. Bookmark the permalink.

About Edward Hugh

Edward 'the bonobo is a Catalan economist of British extraction. After being born, brought-up and educated in the United Kingdom, Edward subsequently settled in Barcelona where he has now lived for over 15 years. As a consequence Edward considers himself to be "Catalan by adoption". He has also to some extent been "adopted by Catalonia", since throughout the current economic crisis he has been a constant voice on TV, radio and in the press arguing in favor of the need for some kind of internal devaluation if Spain wants to stay inside the Euro. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".

3 thoughts on “The Uncertainty Which Surrounds ‘Uncertainty’”

  2. I’m afraid it’s not all waffle. If only we could see the future. My best guess is that if Italy has to exit emu, the future for the ECB doesn’t look too bright, at least not in its present form. In part whether or not Italy has to exit depends on the ECB, at least in the short term. Who will blink first was Nouriel Roubini’s question, and I think it still remains a valid one.

  3. “The Uncertainty Which Surrounds ‘Uncertainty'” Are you talking about those rumsfeldian “unknown unknowns” ?

    “Reports that say that something hasn’t happened are always interesting to me, because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns — the ones we don’t know we don’t know.”

Comments are closed.