One of the biggest problems we currently have with social media is that everybody seems to be entitled to have an opinion about everything. Do not take me wrong, sharing opinions and exchanges ideas is great. The challenge is when those ideas or opinions are not backed up with the right facts and the audience takes it as the only truth.
New wave of ‘experts’
Remember when in COVID days everybody seemed to have a PhDs on how to handle a pandemic? Well, seems old habits never die and now some of these experts have moved to the field of economics providing a very negative outlook of what the world is going to look in the coming years based on a simplistic approach on understanding inflation or seeing how markets are contracting. As an economist, I am not saying that we are in our best economic times, but I do not agree that picturing that pessimistic picture is going to do us any good.
It is all about expectations
Why? Because what this new wave of economic experts most probably do not know are two things that are key to prevent that they pessimistic forecasts turn a reality. First, economy is cyclical – some seemed to forget about history -. There are good times, and bad times. World keeps moving and evolving – especially when applying lessons learned during those bad times. Second, and more important: expectations. People perceptions are one of the big factors on determining how economies will react to change – or economic shocks -. Let me put it in plain words: If I believe that things will go bad, things will go bad. Luckily it applies for the good side :-).
So now you can understand how counterproductive is to have social media filled of those pessimistic economic outlooks based in limited knowledge or using simplistic facts. This has an impact on how people perceive the current economic situation and influences their expectations, which from a macro level has big time implications on the impact on consumption or investment.
Using data for good
Use data for good. Over the past years there has been a huge improvement on making economic data available, that has been gathered and processed under the supervision of great statisticians working in international institutions such United Nations or the World Bank. The beauty of this is that when putting this data together one can see a more colorful picture on how the economies are doing – which can definitely put in question some of the negative trend observed.
Educate people on the right numbers and on basic economic concepts is key to not get easily influenced and set our expectations on what the world looks like right. A very inspiring example is the brilliant work that Hanss Rossling did during his life. Using facts, he blows your mind on how wrong we are in some of the most fundamental perceptions we have on economics and other important topics – such as climate change or education rights. Some of those insights can be found beautifully summarized in his book Factfulness or just grab some popcorn and watch some of his talks.
Educated people = Better world
By getting the facts right and understand that the world is not so bad as you might think, you are automatically setting your expectations right and you are better prepared to take well -informed decisions. This does not mean that all our economic recessions will disappear, but at least you will be equipped to sail any economical storms with the right facts and -most important- with the right mindset.