Forecasters, policymakers, and the public had their predictions proven wrong on massive scales over the past five years, largely due to unpredictable events like the COVID-19 pandemic.
Goldman Sachs chief economist Jan Hatzius highlighted three major errors made by forecasters, with the first one being the underestimation of a V-shaped recovery in spring 2020 due to the unique nature of the economic downturn.
The second error involved the underestimation of inflation rise in 2021, as forecasters were influenced by the low inflation rates of the past three decades, leading to challenges for the Federal Reserve in managing the inflation spike.
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