Source: Pierre Lemieux
by Pierre Lemieux
“Why don’t economics—the analysis of the social consequences of individual actions—and a knowledge of initial conditions suffice to make predictions? There are many reasons. Initial conditions cannot all be perfectly measured and are continuously disturbed, which generates divergent trajectories and creates new surprises as time goes on. Preferences (tastes and values) dwell in the head of each individual. Moral character may be opaque. Thanks to the law of large numbers, the average behavior of a group of individuals may be predictable (consider the law of demand: quantity demanded is an inverse function of price), but the actions of a specific individual are not. The longer the prediction horizon, the more fog in the oracle’s crystal ball. Not surprisingly, my own predictions have not all been glorious.” (01/12/26)
https://pierrelemieux.substack.com/p/not-all-predictions-are-impossible