Nate Silver’s 2012 book The Signal and the Noise: The Art and Science of Prediction is not an economics book per se, and in fact economists sometimes come in for deserved criticism. Hence, you may be thinking that this is a strange choice of book to review in an economics magazine.
Silver’s book focuses on challenges associated with predicting various, seemingly different, phenomena, ranging from the likelihood of earthquakes and their potential magnitude; where hurricanes may hit and their likely severity; baseball player performance; and political election results. There are particularly thought-provoking chapters on climate change and terrorism. Nevertheless, this book also has detailed chapters devoted to economics issues such as our (in)ability to forecast GDP; ‘bubbles’ in financial markets; why the financial crisis of 2007 occurred and crucially why it failed to be forecast. As such the book is compelling to anyone interested in economics, but also more broadly to readers interested in statistics, forecasting and computing.
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