Click here to read a piece by Barry Eichengreen, where he highlights the dangers of analogical reasoning in the area of monetary policy. He suggests that past experiences shape modern central banking practice - the Fed's policy is motivated by a desire to avoid its inaction in the early 1930s and the ECB's policy is motivated by Germany's desire to avoid the hyperinflation of the 1920s. However, these analogies may be the wrong ones for today's problems. To avoid faulty analogical reasoning, Eichengreen suggests having a portfolio of analogies from the past. The bottom line is that economists need to know and understand the past.
The Berkeley Earth Project , an independent study of global warming, has found that the earth has become a degree warmer over the past half century. However, the statistical uncertainty surrounding pre-1920 estimates makes it very hard to say much about long-term trends - click here for graph . This is one of my concerns with the global warming debate - we simply don't have trustworthy long-run data which looks at temperature changes over the last millennium (or two). My second concern with the global warming debate is that it is very hard to prove any sort of casual link between global warming and human activity. The scientists may be able to show correlation between global warming and our production of carbon dioxides etc., but correlation is not causation. My third concern with the debate is that those who are sceptical or agnostic are stereotyped as flat-earthers or intellectually-challenged crackpots. This only stifles debate and the progress of science itself.