Every January, Business Day compiles a list of economists’ predictions for the year ahead. Inevitably it leads to some red faces. In 2012, Steve Keen was not one of them.
This time last year, only one of our forecasting panel was bold enough to say the Reserve Bank would cut its cash rate to 3 per cent by December 31.
It had just cut the rate twice, from 4.75 per cent to 4.25 per cent. The equivalent of five more cuts was unthinkable, except for Steve Keen.
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| A cartoon of Steve Keen that appeared in August 2012. |
The University of Western Sydney iconoclast is famously prepared to back his judgment.
Two years ago he walked 200 kilometres from Canberra’s Parliament House to the top of Mount Kosciuszko wearing a shirt reading: ”I was hopelessly wrong on house prices – ask me how”, after losing a bet with Macquarie Group economist Rory Robertson.
A year before that he took this column’s prize for most accurately picking the global financial crisis. Most of the rest of the BusinessDay panel didn’t think it would happen.
Professor Keen is also the only member of our panel to come close to forecasting the inflation rate.
He picked a mere 2 per cent by December (which is exactly the most recent published figure). The other forecasts were about 2.8 per cent – not shabby but not Keen.
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