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rco8786

In this case the outcome is binary though, "Recession" or "No recession"

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Rollong a 20 vs not 20 is binary, but that doesn't mean it happens 50% of the time.

Recession or not is binary, but that doesn't mean we have a 50% chance of entering one on a given day.

The sides of the dice are financial quarters. The roll is the financial quarter that a recession starts.

If recessions happened every other financial quarter then the outcome would be binary. But historically recessions not that common; they happen in less than 1 in 20 financial quarters. So the D20 analogy is actually something of an understatement.

It’s binary, but not balanced. Specifically, it’s predicting the beginning of a recession, and very few time periods are the beginning of a recession.

So it’s like predicting that you’ll roll a 1 on a die. Flipping a coin for your prediction would say you’ll roll the 1 50% of the time, which is obviously wrong.

It's not binary, it's "is the recession going to happen in the next few months/years", so the prediction is a number. More like D20 in one of the neighbour threads. But not necessarily a D20, could be a D6 so less impressive.

Over thousands of periods. And each time the prediction was no the outcome was no, and among the few times the predictions was yes it happened 50% of the time.

Recessions are forecast on a quarterly basis, so not thousands, but more than 20 between each recession (typically, historically). That's why I chose a D20 -- out of coin/dice/D6/D20/Roulette, it's the RNG that's most reasonably close to the number of quarters between recessions.

How long have we been forecasting? More than 50 years or more than 200 quarters. 5/12 would be 7 misses out of 200, that means it was right 193 out of 200 times.

That doesn't include false negatives of course. Actuals vs positive predictions tells you nothing interesting.

Yeah there are many additional reasons this is different from a coin clip, but the confusion of predicting correctly 50% of the time in a 50/50 event versus 50% of the time for a 1/20+ event was the most glaring issue so I started with that one...

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