The radicals in academic finance would revamp the basic metric of economic performance. The familiar statistics on gross domestic product would be coupled with an index of financial risk-taking, so that the usual focus on growth would be tempered by a measure of the danger that growth might suddenly implode. This month of all months, one craves an equivalent risk-weighting to reflect political uncertainty. Amid the marathon reality show of the American elections, the tense theatre of the Chinese transition and the anarchic agitprop of eurozone politics, non-risk-weighted economic forecasts verge on irrelevance. Even with the US election behind us, this is not about to change.

The International Monetary Fund’s recent World Economic Outlook illustrates the point. The IMF dutifully produced a precise forecast: next year the world economy will grow by 3.6 per cent. But it warned its prediction was based on political assumptions: that US politicians would avoid the fiscal cliff; that European politicians would hold the eurozone together. The IMF might have added that its forecast was also hostage to China’s new leadership. Will China reconcile itself to growth at the new rate of 7-8 per cent, accepting that sustainable, domestically led expansion makes the 10 per cent growth rate of 1990-2011 unattainable? Or will it stimulate aggressively, as it did after the Lehman Brothers bust?

Plainly, the answers to these political questions are far more consequential than fine adjustments to the forecast for housing starts or export growth. In the US, for example, the fiscal cliff involves tax increases and spending cuts worth at least 4 per cent of output next year, or 2.5 percentage points more than the IMF assumes in its base case. Apply a conservative multiplier of 0.8 and the IMF’s projection of 2.1 per cent US growth is reduced to almost zero. Likewise, China’s post-Lehman stimulus caused the year-on-year growth rate to soar from 6.8 per cent in the fourth quarter of 2008 to 10.7 per cent a year later; another fiscal Tarzan act would play havoc with the outlook. Meanwhile in the eurozone, one plausible analysis of a disorderly break-up projected that output would crater by 13 per cent in Greece and 7 per cent in Germany. Given such effects, the IMF’s point estimate for eurozone growth seems beside the point.