in Brazil set of a tornado in Texas?

I would think that the same issues exist in economics in that you can not account for everything in your econometric model. Any small pricing, etc. disturbance could have an impact leaving your predictions to be somewhat lacking. Certain deterministic methodologies have predictabililty limits. Deterministic Chaos . . .

Edward Lorenz, the father of Deterministic Chaos, died April 16, 2008 at 90 years old of cancer. He was hiking but 2 weeks prior to his death. He was known for being a gentleman and weatherman. His was an important discovery that ranks with the discovery of relativity and quantum physics and came shortly thereafter.

So Tim, just ask the question of them:

Does the flapping of abutterfly's wings in Brazil set off a tornando in Texas?

Then give them "Pi" to solve, if they disagree. The solution is in the smallest degree.

In that an economist can not account for every variable nationally and globally, it is very possible to be erroneous in forecasting.

Surely you didn't expect us to let that logic fallacy slide in order to support your argument.

A butterfly flapping its wings doesn't cause a tornado anywhere, because tornadoes come from disturbances in layers throughout the atmosphere and is related to converging supercells and the meeting of hot and cold air.

Likewise, a change in the price of goods in one city or even one small town isn't likely to have a huge impact, if any, on the total economy, except for that of the immediate area. And even then, a change in price is not the sole factor in determining the direction of the economy. Other factors, such as the individual buying power of consumers, the cost of living, consumer confidence in future earnings and many other factors contribute to condition of economics.

The biggest reason why economic forecasters fail is because they only consider economics from the standpoint of your typical economic player: a white man or woman with a few kids, a portfolio, a house, a car, a job and loads of money. They don't consider other people, such as those who are lifelong pennypinchers, the person who saves more of their paycheck than spending it, the people who eschew consumerism, and other anomalies or outliers.

Sigh!

If you understood the story involved, Lorenz dis covered he could not cover every minute part of weather forecasting and his forecast was always in error. He discovered this while attempting to rerun a report via computer. In the end and at best, he could speculate what the weather might be. The same applies to economics in that an economist does not consider all minutia in ascertaining an economic forecast. He can get all the detail and the variables into consideration but miss one detail. That one small missing component may grow and become that economic tornando. Hence, it follows a similar logic of yours.

The comparison between economics and a Lorentz Attractor is a flawed one in my mind.

The Lorentz attractor follows a mathematical formula that produces chaotic results depending upon the starting condition. That is a chaotic result based on a set of concrete rules and conditions. This bears no resemblence to the problems faced with an economist.

Economic problems are difficult if not impossible to solve because they deal with human choice. Choice is a random effect that can not be quantified mathematically, what a person chooses to do or not do is not bound by any set rules or predictable behavior - something a Lorentz Attractor is most definitely is.

You can very easily predict the future result from the classical Lorentz Attractor problem - run the numbers few hundred times and there you have it. You cannot do that with a system based on human choice because the equations and coefficients are ever changing. One run cannot be compared with another run simply because the comparision would be inequivalent.