We should stop trying to predict the economy

When you read forecasts for the economy in newspapers you will most likely read about the IMF predicting an economic growth upwards of 4% for 2021. What you will most likely not read is this paragraph from the IMF report 'The Great Lockdown' those articles are based on:

"There is extreme uncertainty around the global growth forecast. The economic fallout depends on factors that interact in ways that are hard to predict, including the pathway of the pandemic, the intensity and efficacy of containment efforts, the extent of supply disruptions, the repercussions of the dramatic tightening in global financial market conditions, shifts in spending patterns, behavioral changes (such as people avoiding shopping malls and public transportation), confidence effects, and volatile commodity prices. Many countries face a multi-layered crisis comprising a health shock, domestic economic disruptions, plummeting external demand, capital flow reversals, and a collapse in commodity prices. Risks of a worse outcome predominate."

From a scientific point of view this means: we can actually not really predict anything because the behaviour of the parameters we base our projections on are completely unknown. It's like walking blindfolded through a minefield and calculating your chance on survival.

Does this mean we need to panic? No, it does not. What it does mean however is that we need new ways to deal with the situation. We need to stop trying to predict the unknowable and start assessing what is happening. Nassim Taleb already wrote that the business of prediction is actually a waste of energy. We have to decide whether the economic tools we have are still up to the task. I'd say they are not. If they were we would not be facing these problems. We need new tools and we need to redesign our systems in such a way that, when the next pandemic comes along, we can focus on the disease and not waste energy worrying about the economy. You don't build a tower and then frantically occupy yourself with predicting the weather to see whether it will stay upright. You build it so it's able to weather the storm.