18.104.22.168 Unpredictable External Factors
All economic forecasting depends upon assumptions about the future, but the number of unpredictable factors (and the enormous number and variety of transactions) make precise forecasts impossible:
- Innovation can lead to new products and completely new markets.
- Geopolitical events cannot always be predicted with certainty. For example, Britain’s decision to leave the EU in a ‘Brexit’ was not forecast in the opinion polls or by most commentators – as reported in Uptin Saiid’s article, Here’s why the majority of Brexit polls were wrong, which also noted that “The U.K. EU referendum vote prompted a global massive market selloff as markets were priced in expecting a remain outcome. More than two trillion dollars were wiped out globally, the largest drop on record.”
- The weather has an economic impact.
Such factors are compounded by the complexity of the interactions between national economies.
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