The Political Economist

The US National Bureau of Economic Research (NBER), the official tracker of the US business cycle, declared that the recession in the country started in February 2020 . According to NBER February was the peak of the business cycle as jobs already started disappearing (even though the huge COVID-driven unemployment claim spikes didn’t happen until mid-March ). Over the next month and a half over 42 million Americans found themselves out of work. The official unemployment rate shot up to 14.7% in April (it was 3.5% in February), and has declined back to 10.2% in July, as a more encouraging sign of a recovery driven by business re-openings. Due to the effects of COVID-19 the uncertainty in the economy is still huge, and is still the biggest it has ever been according to the Economic Policy Uncertainty Index . Almost every graph we see during the pandemic has a label “unprecedented” attached to it; we are usually looking at a very steep exponential curve facing up (for unemployment, unce...

First of all apologies to my regular readers for not presenting our results here sooner. It's been overwhelming in the past two days - first with the prediction, then with the results, and then with the post-election frenzy.  Anyway, we gave an almost perfect prediction ! Not just a Trump victory, but also all the key swing states (PA, FL, NC, OH), and even that Hillary could get more votes but lose the electoral college vote. Here are our results as I presented them in a Facebook post on the eve of the election: For a more detailed explanation read our blog . The method is described there in greater detail, plus we call all the states. The story got covered first by the academic sources. My own University of Oxford published it as part of their main election coverage , as did my alma mater, LSE on their EUROPP blog . More news coverage soon to come! Details of our prediction  The results nevertheless came as an absolute shock to many, but it was...

My article got published today at the New Scientist ! One of the biggest science magazines in the world. See the text here ( there is no paywall, you just register and read it for free ). It was even on the front page: New Scientist website front page 03 Nov 2106 The text is about the scientific experiment behind our prediction survey . It starts by examining why the pollsters are getting it wrong lately and whether or not there is any science at all behind polling. Then it introduces our prediction survey idea and how we're doing an experiment on US elections to see whether or not science can actually improve polling.  For those who don't bother to register in order to read it on the New Scientist webpage, I have copied the text here (enjoy!): As US election looms, time is ripe for a new science of polling "Growing scepticism about traditional methods for predicting election outcomes is fuelling a search for a more scientific approach to polling, says Vuk ...

Is it possible to have a more accurate prediction by asking people how confident they are that their preferred choice will win? One consequence of this hectic election season has been that people have stopped trusting the polls as much as they did before. Which is surprising given that in the US, unlike the rest of Europe, pollsters and particularly polling aggregation sites (like FiveThirtyEight ) have on aggregate been quite accurate in their predictions thus far. Still, one cannot escape the overall feeling that pollsters are losing their reputation, as they are often being accused of complacency, sampling errors, and even deliberate manipulations. There are legitimate reasons for this however. With the rise of online polls , proper sampling can be extremely difficult. Online polls are based on self-selection of the respondents, making them non-random and hence biased towards a particular voter group (young, better educated, urban population, etc.), despite the efforts of ...

This week my colleagues and I from Oraclum were focused on predicting the outcome of the forthcoming Croatian general election. We did the same thing last year and were not expecting to do Croatian elections again, at least until the local elections in 2017. However, the new government - formed after almost 2 months of post-election negotiations - survived in office for only 6 months. Last year there was no relative winner as the two main coalitions, led by the conservative HDZ and the social-democrat SDP both came tied with 56 seats (76 needed to form government). The biggest surprise was a centrist party MOST which grabbed 19 seats making it the kingmaker party, with a number of smaller parties entering Parliament as well. The new election is to be held this Sunday, and so we ran our unique BASON Survey ( Bayesian Adjusted Social Network Survey ) over the past week to feel the vibe of the voters and make our election prediction. A little bit about the survey before we share ...

On yesterday’s historic referendum , Britain has voted Leave. It was decided by a small margin, 51.9% to 48.1% in favour of Leave, with turnout at a high 72.2% ( highest since the 1990s ). The outcome dealt a decisive blow against PM David Cameron who announced his resignation in the morning. The markets have had a strong negative reaction, with the markets plummeting , and the pound sharply declining to its 30-year low against the dollar. It was an outcome the markets failed to anticipate (or were hoping to avoid), which explains the investors’ abrupt reaction s. Read the initial reactions:  The Economist is in state of disbelief, trying to find a solution, and describing what happens next (invoking Article 50 of the Lisbon Treaty). They also have this interesting piece on the fallen legacy of David Cameron . The FT dreads about "Britain's leap into the dark" , and keeps warning on the negative economic consequences . Martin Wolf also had a good comment. The BBC...

Our final prediction is a close victory for Remain . According to our BAFS method Remain is expected to receive a vote share of   50.5% , giving it a 52.3% chance of winning. Click to enlarge. Source:  Oraclum Intelligence Systems Ltd.  Our prediction produces a probability distribution shown on the graph above (see explanation to the right), presenting a range of likely scenarios for the given vote shares. Over the past week we have consistently been providing estimates of the final vote share and the likelihood of each outcome. Daily changes and close results simply reflect the high levels of uncertainty and ambiguity following the EU referendum. However our prediction survey (the BAFS) has noticed a slight change of trend in favour of Remain in the past two days. This is why our final prediction gives a slight edge towards Remain, and predicts a vote share of 50.5% for Remain, and 49.5% for Leave (the graph below represents the vote share of Leave...

Today we have started with our Brexit survey . I invite all of my UK readers to give it a go. You will be helping us test our new BAFS prediction method . In other words you will be helping us make a better prediction for the upcoming UK EU referendum . As you may or may not know, the polls are showing the country is split. At this point, a week before the referendum the uncertainty regarding the potential outcome is sky-high. With our survey, which will be running until the final day before the referendum, we hope to reduce some of this uncertainty by utilizing our unique BAFS prediction method and forecasting the exact percentage each of the two options will get.  The trick with our survey, as opposed to all others, is that we make our prediction by asking the people not only who they will vote for, but who they think will win, and how they think others will estimate who will win. For further clarification, read more here . This basically means that we are not worried...

Opinion pollsters in the UK came under a fierce line of attack from the public and the media following their joint failure to accurately predict the results of the 2015 UK general election . Months and weeks before the May election the polls were predicting a hung parliament and a virtual tie between Conservatives and Labour, where the outcome would have been another coalition government (a number of combinations were discussed, even the grand coalition between Labour and Conservatives), or even a minority government. The results show that the pollsters, on average, missed the difference between the two parties by 6.8%, which translated into about 100 seats. What was supposed to be one of the closest elections in British history turned out to be a landslide victory for the Conservatives. Naturally, inquiries were made, accusing pollsters of complacency , herding , and deliberate manipulation of their samples . And while there was certainly something that went wrong in the sampling...