Eight days ago, seven before the Brexit vote I made the following prediction as a response to an article ‘Budget threat ‘ends Osborne’s hopes to be PM’’ by Francis Elliot, the Political Editor of the Times (15 June 2016) http://www.thetimes.co.uk/article/57041972-32e0-11e6-9b23-427ef0ad42ff.
This prediction was based upon my study of turning points and the lead indicators of a sudden and locally irreversible collapse in the economy if there was a vote to leave the EU.
I quote directly:
Here to be specific is what I think will happen:
1. There will be an immediate run on the pound with parity against the Euro within the next three months.
2. The stock market will decline to below 5500 rapidly.
3. The UK will enter negative growth by Spring of next year for two quarters i.e., a recession will commence.
4. The government will be forced to remedy an expansion of the deficit by either tax increases and or spending cuts.
That will do for a start - I haven't touched unemployment, capital flight, inward investment and the current account deficit but you can guess what my views might be.
My views were roundly rubbished by Brexiteer’s and by one commenter who believed that any form of modelling in the social sciences was nonsense, particularly when it used models that worked in the hard sciences and engineering. My view was nonsense: all systems – physical and social, that have drivers forcing them to equilibrium where there are two or more control variables in play will exhibit instability. My forecast of a catastrophic realignment of the economy was not given with any gleeful anticipation that it might come to pass. I hope I am wrong but I doubt it.