Question

250-word response that addresses the following question:

In today’s chaotic environment, business and economic forecasting does not make any sense. All a forecast does is show you what is not going to happen. Please comment.

Please cite at least one source such as an academic journal article.

Answer 1

Business and economic forecasting does not make complete sense in today's chaotic world because these forecasting will be based upon various factors which are continuously changing and today's contemporary world of Finance is highly dynamic in nature and it is dependent upon a lot of factor because the ability to forecast does not provide with an accuracy of estimation of what is going to happen because the company will always be trying to eliminate the risk.

Company generally associate themselves with forecasting of various events in order to reduce the risk associated with the external environment but there are a lot of factors beyond the control of the company and the company has no control over the risk so it cannot eliminate the risk and hence it can only estimate what is not going to happen in the future and it has no control over what is going to happen in the future so it can be said that these uncontrollable factors and the systematic risk associated with the external environment will make it extremely hard for the company to forecast any kind of economic events that are going to happen in the future that will be affecting the business and it will not be helping the business to manage proactively so it can be said that the company can always incurr cost on the forecasting which will not be beneficial for the company in the long run and these will be leading to additional cost and non accurate forecasting and hence it can be these forecasting are not helpful for the company because they are not estimating what is going to happen in the long run so due to lack of accuracy and reliability and uncertainty associated with the future, these forecasting method are not applicable much in the contemporary business world.