Macroeconomic Forecasting
Abstract
Annual data was gathered on the United States' Gross Domestic Product and the economic indicators of unemployment, employment growth, inflation, and interest rates. Using 2004 as the base year, forecasts for the next two years were taken from three different forecasting organizations and compared to historical figures. Differences in projected data were addressed as well as relationships between forecasts and among the targeted indicators. The results of the economic forecasts were applied to current Motorola operations and plans. Whether or not Motorola's operations and plans are changed in response to the forecasted information, to avoid threats and take advantage of opportunities, are discussed.
Introduction
Just like the overall health of the human body depends on not only each organ and system working right but their working in harmony with one another so is it with the health of a nation. The economic health of the United States is embodied in its Gross Domestic Product and leading economic indicators, such as inflation or unemployment, are like lab results that give us an idea of just how healthy the economy is.
Economic indicators are Governmental statistics, released on a regular basis, which indicate the growth and health of a country. Economic indicators often affect and influence the value of a country's currency. The Trade Deficit, the Gross National Product (GNP), Industrial Production, the Unemployment Rate, and Business Inventories are examples of economic indicators. We will be dealing with four specific indicators: interest rate, inflation, unemployment, and employment growth as well as Real Gross Domestic Product (GDP). Real GDP is so called because the affects of inflation and depreciation are accounted for in the figures.
The state of the economy is important both on a micro and macroeconomic level. On a macro level, those in government pay close attention to these statistics in order to guide fiscal and monetary policy. On a micro level, households can use this data to guide their consumption and investments, while businesses can use this information in their strategic planning. In looking at economic information, there is current data, historical data, and economic forecasts. This enables decision makers to get a more complete picture of economic trends and see the relationship between various economic indicators.
During the course of this paper, we hope to give the reader a better understanding of the economic forces at play that influence this Nation's GDP, in therefore its economic health.
In conclusion, the current macroeconomic situation in the United States is characterized by moderate growth because of better economic conditions that were brought by the events of 2013. The country has experienced moderate economic growth since the 2008 global recession but has shown real signs of momentum. While the country is not concerned about recession or inflation, the rate of unemployment is still a major challenge despite improved consumer and business confidence. As a result, the Federal Open Market Committee or Federal Reserve System needs to adopt fiscal and monetary policy initiatives that help address the unemployment issue and promote high economic growth.
This paper will discuss the Gross Domestic Product (GDP), meaning the total market value of the country’s output (Case, 2017). I will explain the Expenditure approach and the four components used to calculate the GDP. I will also go over what is not included in the calculation and how inflation and unemployment relate to the growth of the GDP. In addition we will look at how the GDP reflects the economic welfare of our society and finally changes I would make and how they reflect a Christian world view.
Studying economics of any county can be very enlightening. Macroeconomics, which studies the economy as a whole, (Boyes & Melvin, 2012) can give insight on any country’s economic performance. The use of economic indicators such as Growth Domestic Product (GDP), GDP Per capita, GDP spent on military, and the population growth rate can be effective when analyzing the overall well-being of countries such as Australia and India.
The purpose of economic indicators is to provide for researchers and analysts the ability to interpreter economic data. Economic indicators are the main source of prediction of market behavior. They are also detailed explanations of how to analyze various changes over a business cycle.
The U.S. economy is very important to many governments around the world, which mostly depend on the U.S. to function properly. Without the strong economy that the U.S has had, the economy of the world economy would not be in a stable manner as it has been in the past years. Foreign economies depend on the U.S. economy for factors such as, importing and exporting goods. However the economy has not been doing well for the U.S. in the past few years, but slowly it is still repairing itself from a recession but the country is still not safe from being a country without economic
Analyzing past economic events will allow people to learn from previous mistakes. The policies and legislation that is currently in place within a country was established for a reason and it is
The quote, “the difficulty is that forecasting requires more than foreseeing the possibility of an event; in the first place, it requires that a timetable be attached to the probability. This distinction is well enough known to have led to the long-standing comment about economic forecasters that they ‘ have forecast ten of the last two recessions’ is saying that, it cannot be forecasted to exactly what is going to happen only what may happen and what could happen when something may happen. It is saying that with the number of possibilities economists have forecasted a lot of things with not many of them happening. The quote is also saying there is more to the job that guessing what could happen and that a timetable to all of this is needed.
The current state of the economy in the United States has been slow in recent months. While the economy is not currently in a recession, we may eventually fall victim to the first recession we’ve had in nearly ten years. The economy in general is showing growth, just not much. It will be difficult to predict what exactly will happen to the US economy in the future. Many economists do not agree on what will become of the economy. Some feel that we will begin a recession over the next year, and some feel that there is significant policy implementation that will allow us to dodge a recession and regain our economic strength. There are many factors that make up the US economy. The means in which I will discuss the overall growth and current status of the economy is by analyzing the Gross Domestic Product, and discuss the factors that cause it to rise and fall.
It examines the characteristics of the economy output, employment, inflation, and the interest rate. Few of macroeconomics indicators includes inflation, public deficits, and unemployment. “Macroeconomic indicators share important characteristics that set them apart from other indicators, such as those covering human rights or government transparency (e.g. Cooley and Snyder 2015).” Macroeconomics focuses on the economy between businesses and individual household. When the economy is operating at its natural level of employment, there could be an increase in unemployment. “The rate of unemployment consistent with the natural level of employment is called the natural rate of unemployment.” When Business experiences a decrease in production, it may generate additional unemployment. Another goal of macroeconomic is economic growth, which is defined as a long-run process that occurs as an economy’s potential output increase.
In order to assess the current state of the economy, the examination of important economic indicators or variables has always played a vital role in the understanding of the complex economic systems we live in. The analysis of these economic variables studied by many, not only has served as a tool to evaluate the current economic performance of a country, but also has allowed experts to envisage and continue the pavement of an economy's road. Currently, some economic variables have had favorable improvements indicating a general good outlook for the economy for the following months, requiring a further individual analysis and comparisons in order to foresee crisis or successes.
This section will project the parameters of the economic models through its data sources, sample size, and evidently the estimation techniques. This chapter consists of two parts. The first part will introduce the variables together with the reasoning of their selection. The second part will test the variables through hypothesis testing to ensure a fair degree of adequacy for regression analysis.
This study investigates the short-term relationship between the UK stock market index (FTSE 100) and six macroeconomic variables during the period 2000-2013 using a multivariate vector autoregression and Granger causality tests. Variance decomposition and impulse response functions are used to measure the shocks of a variable from the other variables and the Granger causality test is used to investigate the lead-lag relationships among these variables.
Theoretical literature on the relation between health and economic growth suggests that there could be a two way relationship between them. Higher economic growth leads to higher investments in health, and therefore better health. On the other hand, better health is increasingly seen as a key tool in achieving higher economic growth.
Economic growth is one of the most important fields in economics. In current generation economic is developing well. Economic growth is really important to country and for the world as well. Economic are one of the identity for country because it shows a country development and attraction for other countries (F, Peter. 2014). For example well economic develop such as Singapore, Dubai, New York, and Japan. These countries are well develop and maintaining their economic growths. Economic growths are really important because higher average incomes enables consumers to enjoy more goods and services. Then, lower unemployment with higher output and positive economic growth firms tend to utilize more workers creating more employment. Enhanced public
The first lesson to take away from this course is that the functioning of an economy and the standard of living is determined by a country’s ability to produce goods and services. Analyzing macroeconomics is important in understanding the economic system. An example of this would be in the way that we study patterns in numerous variables that control economies.