Terrestrial and Celestial Forces Expose Vulnerable Economists: Financial Crisis 2008 vs. 2020

Abstract

The job of economist is to evaluate economic issues, analyze past economic trends and forecast the economic outlook. Economic forecasting is the process of attempting to predict the future condition of the economy using a combination of widely followed indicators or factors that affect economy. The economist conducts statistical tests and develops statistical models to determine which relationships best describe or predict the behavior of the variables under study. The experts rely on past experience and available economic data which they consider influence the outcome. It is establish fact that history never repeats. The experts fail to anticipate all the influencing factors and its quantum of effect on ultimate outcome. In an attempt to break basics of economy, Sapovadia noted in his work; whenever recession looms around, experts start blaming policy paralysis, wrong policies, policy implementation and vision of the government. Policy makers, their advisers and economist will think around narrow technical aspects of ‘economics’. Economists will talk about structural problems. Hardly someone goes beyond investment, demand, supply, saving, inflation and bank rates (Vrajlal Sapovadia, 2019). Economic forecasting is often described as a flawed science. The recent ‘coronavirus’ outbreak have once again proved that celestial forces can mangle terrestrial planning and forecast. Till end of February 2020 no one realized catastrophic impact of epidemic spread of deadly virus that virtually shaken the Chinese economy, known as dragon. Within three months of the outbreak, epidemic spread limited to China became pandemic hounding more than one third of the world’s countries (at least 66 countries) and over half of the global population.