What's in a name? Quite a lot, it would seem, if the names in question are 'Cosmo' and 'Hermes' - the acronyms for the new and old models of the economy used by the Economic and Social Research Institute.
ormally, this column would stay as far away from econometric modelling as it is possible to get, but some of the changes here are worth a mention.
Cosmo got its big outing last week, with publication of the Institute's Perspectives and Policy Challenges, which covers the economy out to 2025.
I say 'covers' deliberately because there are nomenclature difficulties here too. After the crash, the word 'forecasts' is somewhat out of favour. Now, economists are much readier to admit what has always been true, and always will be: that the future is essentially unknowable.
This is a problem for journalists as well as economists. Who wants to know what happened yesterday? They ask: "Tell me, should I sell my shares?" "'Fraid I can't help you there madam, but if you don't know what happened yesterday, only luck can get it right about tomorrow".
Which is more or less what models do - shove in as many of all our yesterdays as they can, so that one can see what the economy is likely to do, depending on what happens in the future. A good model is very useful when the future arrives, but it cannot tell you which future it will be. Who would have put Donald Trump in the assumptions?
Cosmo contains more about yesterday than its predecessor. In particular, it incorporates the effects of credit availability and property prices on the economy.