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Why does macroeconomics systematically fails to predict crises?

Economics Dec 15, 2020

Why does macroeconomics systematically fails to predict crises?

Expert Solution

Macroeconomics studies how limited resources are utilized by the economy in the production of goods and services. Macroeconomics predicts crises which may happen as predicted or fail to happen as predicted. But sometimes, macroeconomics fails to predict crises because of the following reasons:

  1. Diverse and conflicting opinions of different macroeconomists
  2. A conflux of new events which have never happened before
  3. Failure to collect all the required or relevant data
  4. Improper and untimely control of events.
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