Donald Trump’s election as President of the United States on Tuesday coincides with a colossal failure of the data models that predicted the opposite. Some commentators have been quick to see parallels between the crash of quantitative political forecasting and efforts to estimate recession risk in real time. But the two efforts are very different animals, or at least they can be, depending on the model design. The devil’s always in the details, of course, although a well-designed macro model that focuses on estimating the probability of economic contraction can avoid many of the pitfalls that bedevil election forecasting.
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