Prediction is famously difficult, as one wag put it, especially if it is about the future. So now that we’ve passed the five year mark in the Iraq adventure, who was in fact right about the likely costs of it? Certainly it wasn’t those proposing the invasion, some of whom proposed numbers as low as $50 billion in total costs. Of all that did, indeed, try to add up the costs, the only one who gave us a figure even remotely comparable was William Nordhaus. If Nordhaus has indeed been that one good predictor on one subject, perhaps we should be paying especial attention to his predictions on other matters as well? Like, for example, the area where his reputation really comes from, the predictions about the costs both of climate change and attempts to mitigate it through reductions in emissions.
Made your plans for the upcoming financial Armageddon yet? Betting upon a second Great Depression, or are you like me and thinking that yes, we’ve got some tough times coming, but the only people that can create disaster are the politicians? Sadly, that last isn’t quite as comforting as it could be for it was the politicians and bank regulation itself that created the first depression: as long as we don’t make the same mistakes again (or newer and even more inventive ones) the disaster, although perhaps not a recession, can be avoided.