The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."

Sunday, February 6, 2011

Economists are crappy forecasters of inflation (chart)

The interesting thing about this chart is that it shows that market economists are pretty crappy forecasters of inflation, and believe that the RBA can credibly meet its inflation target of 2.5% pa. Unfortunately, neither the "market" nor consumers have such faith. Indeed, the market seems to be a better guide over time. The RBA will start having kittens if inflation expectations drift up.