A wonderful op-ed over @ the FT (link below) where El-Erian discusses the relationship between investors and economists and arguably how economists aren’t necessarily the best sources of information when making investment decisions. Enjoy the read 🙂

Judging by past experience, economists are not well placed to make confident predictions about the risk of greater economic and financial instability. Productivity trends are hard to measure accurately, let alone predict. The record on assessing financial instability is even worse. It is not just that most economists misjudged the run-up to the 2008 financial crisis; even Fed officials, who arguably are a lot closer to markets, were shocked by last year’s severe “taper tantrum”. And if all these people cannot get their arms around the underlying fragility of the financial system, it is difficult to be confident about the effectiveness of macroprudential measures.

Source: FT