What economists can learn from engineers | Letters

This week there is much unenlightening squabbling about economic forecasts. In 1971 I arrived at university intending to read engineering and economics. After two weeks I swapped to pure engineering because I had realised that there was no "right answer" in economics. I have spent my life developing mathematical models of physical systems and making "engineering forecasts" or predictions, as engineers call them. Now, older and wiser, I realise that there is no right answer in engineering either.

However, engineers address that difficulty directly. It is standard engineering practice to attach an estimate of error or uncertainty to a central estimate - to provide only a central estimate can be highly misleading. It seems this approach has not reached economics. With proper analysis of the forecasting model it will be possible to attach a probability of exceedance to any central estimate. The Brexiters might then adopt a level with, say, a 30% probability of exceedance (optimistic), whereas the remainers might adopt 60% (cautious). Political interpretation of a result can then be clearly distinguished from the model used to derive it. Such an approach might also have been useful before the referendum. I recommend it to economists who may find the results both frightening and embarrassing!
Andrew Garrad
Bristol