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Planning

Scenarios are not merely uncertain forecasts

Hans Timmer's picture

My previous blog ended with a question about the usefulness of anticipating the long-term future if that future is highly uncertain. Ever since the 1982 article on “Trends and random walks in macroeconomic time series” by Nelson and Plosser, there has been a debate about the long-term statistical properties of GDP and other macroeconomic variables. Nelson and Plosser could not reject the hypothesis of a random walk (with drift), which means that random shocks have a permanent impact on the level of GDP and that the uncertainty interval around forecasts becomes wider and wider with every year you try to peek farther into the future. The message seems to be: If next year’s world is already very uncertain, don’t even bother forecasting the world in 2030.

Others found that “macroeconomic time series are best construed as stationary fluctuations around a deterministic trend function”, if you allow for a few structural breaks in the trend. The consequences for long-term forecasting are huge because, in this case, random shocks are transitory, there is mean reversion, and it is in fact easier to analyze long-term trends than short-term fluctuations.

Near Epicenter of Japan’s Earthquake, a New Push to Make ‘This World Safer’

Donna Barne's picture

On a grassy coastal plain near Sendai, Japan, stands a symbol of survival.

The four-story school house was the tallest building in the neighborhood of 980 homes, where children once played and went to school but now mostly consists of the remnants of concrete housing foundations. In Japan’s March 11, 2011 disaster, more than 300 people made it onto the roof of Arahama Elementary and survived the massive tsunami that hit Japan’s shores. School and community evacuation drills and preparedness saved lives that day, Principal Takao Kawamura said.

The school’s experience resonated at the Sendai Dialogue on October 10—where leaders, disaster and development experts debated how to better prepare for disasters in an increasingly risky world, where disasters have doubled in 30 years.

It’s a bridge! It’s a bus! But is it real?

Holly Krambeck's picture

Since May, the Internet has been a-buzz with the “bridge bus”, a never-before-seen public transit contraption scheduled for a 186 km route pilot in Beijing later this year. The bus straddles existing roadway lanes, creating a moving tunnel-like effect for the vehicles underneath. The vehicle’s Shenzhen-based designers claim that the system can move up to 1,200 passengers at a time (300 per bus), without taking away from existing road space, while at the same time reducing fuel consumption (the bridge bus runs on electricity, partially supplied by solar panels), and at a lower cost than building a subway. A revolution!

I am a big fan of entrepreneurial innovation in transit. And when I see something truly innovative and different come out of one of the countries where we work, I get very excited! But there is something about this concept -- something that doesn’t seem quite right…

Rise of the Chinese Ghost Town

Holly Krambeck's picture

 

In Chenggong, there are more than a hundred-thousand new apartments with no occupants, lush tree-lined streets with no cars, enormous office buildings with no workers, and billboards advertising cold medicine and real estate services – with no one to see them.

As my colleagues and I wandered, on–foot, down the center of Chenggong’s empty 8-lane boulevards and dedicated bus lanes, never seeing a single person, we marveled about the fiscal and political conditions that would have to exist to create something like this.  

Accessible and inclusive transport: can we achieve it?

Julie Babinard's picture

Have you ever been to a foreign city and not been able to figure out the names of the stations or directions of that city’s metro? Did you feel completely lost and upset with whoever designed the system? Maybe as a parent you have tried taking a bus with a stroller and gave up because you were not able to take it up the steep stairs? Or maybe you had to walk on the road among traffic and cars  because the sidewalk was blocked by construction or parked cars?