Social Interaction, Emotion, and Economic Forecasting

Abstract

From the perspective of traditional philosophies of science, economic forecasts may be perceived as the results of purely rational reasoning, applying scientific theories, and econometric modeling. Yet, a sociological view on economic forecasting shows that economic forecasts mobilize more than these conventional epistemic resources. First, economic forecasters are embedded in a huge interaction network including different kinds of economists, policy makers, and representatives of the economy. In the epistemic process of economic forecasting, this network actively helps improve the forecasts in (at least) three ways: it helps forecasters to produce new imaginaries of the economic future and to discover emerging developments, it increases the forecasts’ social legitimacy, and it produces a common view on the economic future that helps to decrease uncertainty in markets. Second, economic forecasters mobilize emotions that help them to overcome the shortcomings of quantitative data, statistics, and econometric modeling: they develop a feeling for numbers – and numbers support them in developing a feeling for the economy – they have to control their emotions to keep cool when the economy or politics confronts them with increasing dynamics, and they are impassioned about their work. Drawing on data gathered in numerous economic forecasting institutes in Germany, Austria, and Switzerland, I argue that the main resources in producing credible and accurate economic forecasts consist of various forms of social interaction and the mobilization of emotion.