The Power of Changing Your Mind

You can mathematically prove that changing your mind makes you smarter. That is the entire

point of Bayes’ Theorem. It is the golden rule in econometrics for updating your

predictions when new data drops. Instead of sticking to a blind guess, you take your initial

belief, known as the prior, and filter it through new evidence. The formula combines

them to give you the posterior probability. Basically, it calculates the exact odds of something

happening given what you just learned. This is how economic forecasting actually works.

It is not magic, it is just learning how to be less wrong every single day.