Economic Forecasting Limitations

By Russ Roberts, Hoover Institution economics expert in 2/27/10 WSJ:
Economists have learned some things that have stood the test of time and that we almost all agree on --- the general connection between the money supply and inflation, for example. But the arsenal of the modern econometrician is vastly overrated as a diviner of truth. Nearly all economists accept the fundamental principles of microeconomics -- that incentives matter, that trade creates prosperity --- even if we disagree on the implications for public policy. But the business cycle and the ability to steer the economy out of recession may be beyond us.