When SARS was in its infancy in 2003, Tim Harcourt Chief Economist at the Australian Trade Commission said, “Every year economic forecasters have to contend with an “X Factor”, and I am sure that it is fair to say that this year we are already not only dealing with two “X Factors” and let’s call the first the global economic crisis and the second, the “X+1 Factor” the dramatic increases in the cost of fuel.
Now though we are dealing with another potentially cataclysmic factor, let’s call it the “X+2 Factor” – the outbreak of Swine Flu in Mexico and its rampaging and potentially devastating progress throughout the world.
As Tim Harcourt also said in 2003, “How many more can there be?” “Sure, we can all do our trend forecasts, factor on tax changes and other once-off policy related factors, seasonally adjust here and there, nip and tuck and so on.”
“And just when we economists think we have a handle on everything – whoosh! – in comes “Factor X” and wipes out all our neat little certainties and sensible predictions.” Read the full story