The one thing forecasting adds#
Back of the Envelope · Week 10
No new machinery#
A chain is still a chain. Assumptions still need naming. A range still needs an honest width.
Nothing this course has taught you stops applying the moment the target moves into next month instead of last year.
“…not…until 2024 at the earliest.”
The Reserve Bank of Australia’s Governor, 2 February 2021.
3 May 2022#
Fifteen months later, the same Governor: the cash rate target raised 25 basis points.
Not before 2024 became a rise in May 2022. The calendar was the only judge required.
The one variable that changed is the check#
Not the reasoning — a forecast cannot be evaluated by argument, however careful.
Quality is not a property you can establish when you make the claim. It is a property a record establishes later, once the date has passed.
Canberra Airport, 20 May 2027#
Official daily maximum temperature, Bureau of Meteorology Daily Weather Observations.
- a low bound
- a high bound
- a confidence, in plain words
- a line naming what would have to be true about that day for the range to miss
Sealed. Not opened until Week 12.
Memory reconstructs confidence to match outcomes#
Write a forecast down and forget to keep the record, and by the time it resolves you cannot know whether you would have been impressed with yourself.
A sealed, dated record is the only defence against your own hindsight.