Talk:Austrian predictions

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Of course, if we're going to be scientific about determining how good Austrian school economists have been at making accurate predictions, then we should also make note of predictions that turned out to be false. I.e., if an Austrian economist said, "If p happens, then q will happen" and subsequently p happened but q never happened (within a reasonable timeframe), that would be a false prediction. Our data is subject to confirmation bias if we only concern ourselves with evidence that backs up our position. Readers will be aware of that bias and judge accordingly. Nathan Larson (talk) 19:39, 12 August 2012 (MSD)

Do you have some examples of Austrian predictions that were proven wrong? --John James (talk) 21:20, 12 August 2012 (MSD)
Maybe the massive inflationary depression that Rothbard predicted? It's mostly the inflationary part that didn't happen. See discussion at MisesWiki talk:Call to Action/Austrian predictions. Nathan Larson (talk) 21:27, 12 August 2012 (MSD)
This question has haunted me. I thought for a long time on how to grasp this problem, got busy with other things, forgot about it, then remembered again, then forgot about it again.
The trouble is not that we shouldn't do it - I for one would like to see how consistently Austrians can predict (especially some of the current favorites) and compare to other economists - the big question is how? The one major warning of Austrian Economics is that it's extremely hard to foresee future. If we would start listing failed predictions from anyone that is tagged as an Austrian, we'd probably get an infinite record of failures and successes, filled by bloggers and forum posters. :)
Anyway, if we were to be "scientific" about this (which we are not, and I don't how we can be), we would need:
  • notable Austrian figures, that made
  • clear predictions - "If p happens, then q will happen", with a reasonable timeframe (ideally included in the prediction itself)
  • Evaluation: was the prediction a success, a failure, or a partial?
  • Did the Austrian in question address the prediction later on (or somebody else)? Was there an unexpected development, lacking theory, or a wrong judgement? Did they get it right the next time?
The more predictions would be evaluated in detail, the more clear of a picture would emerge.
These predictions should be attached to the persons' wiki pages - by creating a subpage for each (e.g. Murray Rothbard/Predictions).
With all this, I'm still not sure if such an analysis would give a solid enough picture of the Austrian School. Personally, I would be mainly interested in people that make their living with predictions, and then with anyone staking their public image on them (like Mark Faber, or Peter Schiff's famous bet with Art Laffer).
To answer the very first point though - we are not being scientific about this, and the page itself warns about the risks of predicting at its beginning. To evaluate something like this would require a massive study devoted to comparing AE with other schools. Pestergaines (talk) 00:10, 26 November 2012 (MSK)
It haunts me too. Austrians say "Look at the evidence supporting our claims" but also "This science doesn't lend itself to proof by such means." How do we know we are right? Nathan Larson (talk) 03:27, 26 November 2012

Here's a nice little article pointing out some failed Austrian predictions about a coming massive inflation; the useful bit is pointing out where they went wrong. It is, suprise-surprise a supply and demand question. (A prediction is included, too.) Pestergaines (talk) 16:24, 24 November 2014 (EST)

I don't really understand the conundrum, to be honest. Instead of taking CPI (which many Austrians have pointed out the flaws in time and time again), if you take as a measure of price inflation--say...the price of gold in terms of looks like the Austrians were spot on. There was a lot of price inflation that followed the monetary inflation after 2008, and when the taper was announced, it flattened, and only recently as the monetary inflation has decreased has the price inflation (measured in terms of gold) dropped as well. Although, I agree with the logic of the cash balances (I'm somewhat hesitant to say this, seeing as you've probably been following my edits Pestergaines, so you can see I only "figured out" (somewhat) definitions of the money supply somewhat recently =P), I don't think this is the case. If it were true, you would expect the growth of the money supply to be reflected significantly more in TMS1 as opposed to TMS2 as opposed to past trends. However, this doesn't seem to be the case (except for very recent price movements). Tl;dr, the Austrians predicted price inflation and as far as my knowledge is concerned there was indeed price inflation. Smith (talk) 17:14, 24 November 2014 (EST)
To me, the conundrum is more about the predictions of hyperinflation, which seemed to be all over the place for a while. That's something the article argues really well against - it is possible, for sure, with a massive increase in supply... but one should never forget about the demand part. Pestergaines (talk) 17:32, 24 November 2014 (EST)
Ah, yeah. I can understand an uptick in price inflation, but I don't understand the hyperinflation claim. The TMS metric had been moving up at a much more moderate tick, but not at the speed one would expect for hyperinflation. Smith (talk) 01:53, 25 November 2014 (EST)

Another example

David Stockman on Mises and Hazlitt says that "Henry Hazlitt . . . titled his March 1969 Newsweek column “The Coming Monetary Collapse.” Hazlitt publicly warned the White House that ‘one of these days the United States will be openly forced to refuse to pay out any more of its gold at $35 an ounce.’ The result, Hazlitt insisted, would be a ‘run or crisis in the foreign exchange market’ that could end convertability entirely. ‘If it does . . . the consequences for the United States and the world will be grave.’ " Can't find the Newsweek column so can't confirm it, but it looks like a pretty good one. Pestergaines (talk) 11:40, 20 April 2013 (MSD)


A copy of the page is also now featured at what appears to be an asset management company from Liechtenstein. :) Pestergaines (talk) 20:37, 8 September 2013 (MSK)