By Gerry Simons, Professor of Economics

I’ve lived in Michigan for 28 years now but I’m not proud to say that I haven’t yet fully embraced Michigan winters. An average winter for me growing up in the U.K. involved infrequent, light snowfall, but after moving to Michigan I quickly adapted by routinely checking the forecast and never venturing out without my full weather garb of parka, mittens, and wooly hat and, I will admit, many times I would curse the cold and the snow and the ice. And so I enjoyed our unseasonably warm and unsnowy December of 2023, viewing it as a soft introduction to the season and hoping against hope that the mild weather would continue well into the new year. Though the local TV meteorologists would warn against complacency, I fell out of my usual winter habits and began to base my clothing decisions on the weather from the day before, rarely checking the forecast, and leaving my mittens and hat on the shelf. But as any Michigander would tell you, the weather here can be unpredictable. My assumption that each day would be like the recent past was naïve at best.

As with the weather, so too with the economy. Month after month this past year, many of us have been asking if we will have a soft landing or if the repeated interest rate hikes will trigger a recession. Should we hope for the best, and perhaps expand and invest, or brace for a cold economic winter?

Looking only at past experience to predict the future is what economists call “adaptive expectations.” But adaptive expectations are inferior in decision-making to so-called “rational expectations” which combine past experience with all other relevant information and, importantly, thoughtful and thorough analysis. It is this thoughtful and thorough analysis that we provide with the Seidman Business Review, where our aim is always to inform and educate. So, as you read this edition’s articles, I hope that you can use our faculty’s expertise and insights to improve your expectations and enhance your own decision-making in the seasons ahead.