Choose Your Own Economy

Compounded Confusion
Misleading Theories
Giant Consequences
San Francisco, Florida, and Cape Town

If you’re a parent or grandparent, you may know of the “Choose Your Own Adventure” storybook series. Written in second person, they make “you” the hero. The reader makes choices as the story unfolds, leading to one of several possible endings.

That format is disturbingly similar to a lot of economic forecasting. The economist—who of course envisions himself a hero (don’t we all, at least privately?)—chooses models or datasets that lead to places potentially quite different from those who make other choices. The differences grow wider as the stories unfold. The endings, while unique to each economist, are satisfying because they always reflect those initial choices. There’s no right or wrong ending… just the one you created.


The economy isn’t a storybook. It’s the real world and it affects everyone. Its direction depends in part on the policy choices of central bankers and government leaders. To make good choices, they need to know with reasonable confidence what proposed policies will do.