The Economists Urging Us to Embrace Uncertainty Instead of Forecasts
The author of ‘Radical Uncertainty’ on why building resilience matters more than predicting the future
Now faced with an uncertain future, most businesses are clinging to forecasts: what the toll of this pandemic will be, how long before businesses can reopen, or the likelihood that we might experience another event like this one. But relying on prediction models might be the wrong approach, argue two leading British economists in their new book, Radical Uncertainty: Decision-Making Beyond the Numbers.
In it, John Kay, an economist and fellow at St. John’s College at the University of Oxford, and Mervyn King, who led the Bank of England during the Great Recession and now teaches at NYU and the London School of Economics, investigate how probabilities and modeling have come to dominate the world of decision-making and offer an alternative to dealing with uncertainty that goes beyond assigning numbers to possible outcomes.
Marker spoke with King about the flaws of prediction models and how businesses should plan for uncertain times. This interview has been condensed and edited for clarity.
Marker: In your book, which was written before the Covid-19 outbreak, you write that “we must expect…
