happening. but if the event does actually happen in the prescribed time frame, which forecast was more accurate? unfortunately that ’ s hard to assess. in the end, track records built up over time can help you sort out luck from skill. time frames help here too. beware the ‘ i told you so ’ forecaster. put a prediction out there without any expiry date and many years down the track when the event actually happens then ‘ i told you so ’. pick the one in 100 event that no one saw coming. was the forecaster really good? or were they the monkey that wrote hamlet? closely related to ‘ i told you so ’ is ‘ just wait, it ’ s still coming '. tetlock highlights an example from 2012 when a bunch of luminaries wrote a petition that quantitative easing ( qe ) in the us would generate high inflation and currency debasement. six years down the track, inflation in the us is struggling to stay above 2 per cent. but without a time limit on the prediction, they might one day claim to be right. to be a useful prediction, it needs some time frame and some probability of occurrence. the best australian example of this might be a housing market crash. 1 / 2 bis central bankers'speeches ideally the probability of something occurring gets updated through time as new information comes to hand so you can say whether it is getting more or less likely. this is the bayesian approach that underpins nate silver and the fivethirtyeight team ’ s approach to prediction described in nate ’ s book the signal and the noise. continually update your assessment of likely outcomes as new information comes in. journalists ( and policymakers ) need to filter and clarify. filtering all the predictions out there is hard. clarifying what they actually mean is hard. how do you assess the validity of the claims? should you assess them or just report them? how much editorial input should you bring to bear? what is the motivation of those making the claims? are they rewarded by the headline or the click? are you reporting the story that will deliver the best headline, the most quotable quote or are you reporting the more boring, more likely outcome? to give an example, often the most accurate statement about why the stock market rose today is that it occurred for any one of a hundred different reasons, or for a mix of all of them. 2 or my favourite explanation : because there were more buyers than sellers. not as punch

down on your seat and begin to feel comfortable, you would expect or hope for a smooth and swift journey to your final destination : success – however you define it. to your big surprise, this is not what it is going to be. it is not a non - stop train and it annoyingly makes many stops on the way. every time the train stops, there are new passengers boarding the train and, as your cabin is already full, you will always have to fight to protect your seat, or else you may be forced out from your seat. occasionally, misfortune may fall on you. not only do you lose your seat, but you are also bumped off the train at one of the stops. while all these passengers who got bumped off the trains will naturally feel aggrieved and frustrated, they can have two kinds of responses. some would complain to the station master about the unfair or rough way they are treated on the train and demand “ justice ”. however, some may decide that, since they still have the train tickets in their hands, they ’ d rather not waste time complaining to the station master about the fierce competition or bad luck, but they should instead try to board the next train that stops at this station. if you belong to this latter category, you may be able to find yourself a seat on the next train, or even a better seat than your previous one. however, there is a difference this time : you have to work really hard, and much harder than before, as you are a late passenger trying to board a train that is already full. the simple truth is, unless you are on a train, you don ’ t have the chance to move forward and will never come closer to your destination : success. bis central bankers ’ speeches 5. if you feel that i should not be depicting a rather scary train journey on this auspicious and joyful occasion, then please forgive me and let me try another scenario for you to think about, again using my train journey story. 6. suppose that you have been bumped off the train once or twice and have found your way back onto the next trains to carry on with the journey. you will gradually realise that there are certain rules and disciplines on the train that determine who get the good seats, who can be upgraded from the economy cabin to the business class and then the first class cabin. there are also rules and booking system that govern who can enjoy a good meal at the dining car and when