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The only function of economic forecasting is to make astrology look respectable. -- J K Galbraith:
by RiderOfGiraffes 16y ago
The only function of economic forecasting
is to make astrology look respectable.
-- J K Galbraith:
- yummyfajitas 16y agoWhat is the relevance of the quote? Near as I can tell, the article is not engaging in economic forecasting, they are simply looking at historical data. (Note: I haven't read all of the paper, so please correct me if the details involve forecasting.)
- _grrr 16y agoI would agree. HFT strategies are unlikely to have anything to do with 'economic' forecasting - even in the short term. They are about order-book and micro-market dynamics.
- RiderOfGiraffes 16y agoPart of the point is that it is looking at historical data, and that most academic economics results look at historical data, and historical data does not, for example (as I understand it), enable predictions of the crashes of 1929 or 2008. This paper is fundamentally talking about "normal" trading conditions, and the continuing danger is that results like this will be used to bolster the contention that HFT is in fact a good thing, whereas when the market crashes it might be an incredibly bad thing. I'm not saying it is or it isn't, I'm just saying that there seem to be a lot of assumptions that aren't being made explicit, those assumptions might not be valid, and when they're not valid, all predictions go out the window. Hence the quotation. I should add that perhaps this is no surprise. A claim I've seen made is that the information economists need to be accurate is fundamentally undiscoverable. Hence the article I lunk to earlier: http://news.ycombinator.com/item?id=1686077 http://news.ycombinator.com/item?id=1686077