Uncertain economic patterns
Unpredictability of key economic variables
Historical analysis of international, national and sectoral economies indicates regularities and irregularities of behaviour. The regularities can be expressed by two models, the linear and the curvilinear, the linear indicates the straight path of sustained economic growth, or decline. The curvilinear, closed such as in a circle or open in rising and falling waves, indicates economic cyclicity. Both types of behaviour proceed for relatively short periods as regular phenomena. They are interrupted by unpredictable transitions and major dislocations which are argued by some to be the causes of economic conditions and by others to be the effects of accumulated economic forces. Economic prediction works very well retrospectively, with authors proving their economic philosophies by well-chosen examples, but no economic methodology has emerged that can deal prospectively with the variables in an open, world system. Recent experiences with the most advanced forecasting techniques known indicate that governments and industries cannot make an accurate comprehensive forecast five years ahead, although high correlations may be obtained in some areas. There remains, however, an excessive reliance on forecasting in economic as well as in social policy determinations.