- Weather forecasts are based on understanding the big forces. that day's dynamics and explictly state their margin of error/give a range. Also, these are based on huge masses of data
- Economic forecasts are similar but do not generally explicitly state margin of error.
- Decisions based on economic forecasts may alter the outcome(like policy making, saving, spending) and so the process of economic forecasting is much more difficult.
But to satisfy the logical side of us that hates ambiguity, forecasts are essential. So how to improve economic forecasts? Apart from not forgetting the big trends, having and using huge data masses of stock price/economic indicators should improve the accuracy. But most importantly, like how auditors are careful to word their audit reports to reflect the limited scope/margin of error, even economic forecasters should do the same, to bring more credibility to the profession.