It’s not just forecasting the future economists have trouble with; they’re not so hot on the past either

Continuing my occasional series in how economic figures often turn out to be massively wrong, not only about the future but also in the much easier task of recording the past too, here is a graph from the Office for Budget Responsibility showing how much change there has been in estimates of business investment:

Note in particular what happened with the 2013 revision – making huge changes to the figures for a decade earlier – and also how the 2014 revision shows investment now above the pre-crash peak when before it wasn’t close.

As I wrote before:

Economic data: it fuels political debate, fills acres of news print and gets fed into regression equations attempting to explain and predict political party support.

There’s just one problem. It gets massively revised years afterwards.

UPDATE: I returned to this theme several years later in my book, Bad News.