Unpredictable External Factors

All economic forecasting depends upon assumptions about the future, but the number of unpredictable factors (and the enormous number and variety of transactions) make precise forecasts impossible:

  • Innovation can lead to new products and completely new markets.
  • Geopolitical events cannot always be predicted with certainty. For example, Britain’s decision to leave the EU in a ‘Brexit’ was not forecast in the opinion polls or by most commentators – as reported in Uptin Saiid’s article, Here’s why the majority of Brexit polls were wrong, which also noted that “The U.K. EU referendum vote prompted a global massive market selloff as markets were priced in expecting a remain outcome. More than two trillion dollars were wiped out globally, the largest drop on record.”
  • The weather has an economic impact.

Such factors are compounded by the complexity of the interactions between national economies.



This is a current page, from the Patterns of Power Edition 3a book, © PatternsofPower.org, 2020.  An archived copy of it is held at https://www.patternsofpower.org/edition03/3352a.htm