Forecasting success of the Thematic approach
I have nearly three decades in policymaking and markets on which to base my faith in the fundamental, theme-based framework I use for analysis and forecasting. Much of my track record is published and verifiable, some is not. Regardless, the representative sample assembled below, stretching back over two decades, illustrates well how the Thematic approach can help one predict future events when applied within a consistent, logical framework. For full disclosure, I also have included some of my most embarrassing failures.
Missingflation

Economists don’t understand inflation
What are economists missing about inflation? In the two decades before Covid, market analysts, academic economists and central banks consistently overforecast inflation; in the last two years they have persistently underforecast it. Enduring one-way errors are not…
Believing is being

Self-fulfilling beliefs are real
Beliefs drive everything from asset bubbles, to debt dynamics, to crypto currencies’ values, to inflation and hyperinflations (probably Missingflation, too). Good economists understand this but often omit beliefs from models to simplify because of the difficulty in…
Localization

Automation is unwinding globalisation
Human economic history largely has been a story of increasing economic globalization, yet the last decade has witnessed the reverse: localization of production. The trend began before trade wars and is likely to continue well after Covid and the Politics of Rage…
Complexity cascades

Complex systems fail unpredictably
Human societies, nation states and (especially) economies are examples of complex systems. Complex systems always operate in “broken” mode and ironically are more structurally stable when they have lots of small failures. But when they are subjected to massive…
Uncertainty

Not all risks can be quantified
All risks are not the same. Some are quantifiable, like the chance of being dealt an ace in a game of cards. Others are not but can be subjectively guessed, like the chance you leave a casino a winner. Then there is uncertainty, the most dangerous of all risks because it..
Politics of Rage

The proletariat want their franchise back
Four decades ago, globalization and increasing economic returns to intellectual capital opened a fissure between elites and everyone else, especially in more developed economies. The economic and political consequences of Apex neoliberalism widened this fissure into a…