Thursday, 24 January 2013

Just Google It...

by Karina Shooter

How Google searches can predict economic indicators and give us an accurate picture of today’s economy

Google, searches, economic data, economics
Up until recently, Central banks have only used official data when calculating and predicting economic indicators such as unemployment, housing starts and consumer confidence.  However official data is published a significant time after it has been collected (usually at least a month) which means that bankers found it difficult to calculate up-to-date predictions. How could bankers determine the present and future state of the economy, using figures that were only a reflection of the past? As Brynjolfsson, a professor at MIT, said “When central bankers were looking at traditional data, they were essentially looking out the rear-view mirror.”

However research has emerged which suggests that by analysing Google searches, we can obtain a clear picture of today’s economy as well as being able to accurately predict future cycles. For example, when trying to estimate unemployment figures, researchers found that by calculating the proportion of Google searches which contained key words such as “JSA” (short for jobseeker’s allowance), “jobs” and even “solitaire”, they could accurately calculate figures that almost exactly matched the official data when it was published weeks later.

Sunday, 20 January 2013

The Big Questions: Book Review

by Viva Avasthi
                                                                       Rating out of 5: ★★★

I don’t know how many of the readers of this blog are familiar with the writings of Steven E. Landsburg, a professor of economics at the University of Rochester in Rochester, New York. For me, this was the first time I’d read any of his books despite the fact that another of his books, entitled ‘The Armchair Economist’, is far more popular.

The book has been written to fulfil the purpose of “tackling the problems of philosophy with ideas from mathematics, economics and physics”, which sounds brilliant, but it’s arguable as to whether the author actually manages to achieve this purpose as well as could be expected from a best-selling author.

In his introduction to the book, Landsburg writes:

“In this book, I’ll tell you what I believe about the nature of reality, the basis of knowledge, and the foundations of ethics. I’m not sure any of my beliefs are right, but I’ll explain why I think they’re plausible – and more likely to be right than any other beliefs. (Though of course I might eventually be convinced otherwise by new arguments.)”