Economic Forecasting

Economic Forecasting

In our first weeks lecture we learned what the study of macroeconomics means to us on an individual level and its importance to those of us who aim to be in upper management. Understanding the circular modern economics model gave us insight into just how interconnected and dependent people, companies, and the government are on each other in order for an economy to grow. Knowing how to find and analyze historical economic data is important as it will help you to prepare and forecast for future economic trends.

Aside from the eight sources that were provided by Dr. Trent in his handout, our team sought out several other useful websites via the internet that would prove to be useful in gathering historical data as well as forecast economic data. Moody's Analytics proved to be an excellent source for information that has already been analyzed for you. They cover the entire globe and offer information that is analyzed on a global scale as well as on a regional scale. It contains both qualitative and quantitative data. This site does however charge for their information. The information offered is very detailed and depending on the region, they offer forecast for up to 30 year outlooks with alternative scenarios included. A company looking to expand its market would find this sites information meaningful to their decision making process.

The New York Stock Exchange (NYSE) website is another great source of economic data. You will find both qualitative and quantitative economic data there as well. The site offers real time data on what's happening in the national and global market. There are charts and graphs as well as detailed analysis of forecast indicators. They have a section on financial literacy that breaks down how the stock market works and explains what things such as stocks, bonds, and futures are. This site is purely financial. It will not offer much forecast based on demographics or regions but more based off of historical financial performance, though some of the analyst may offer such information.

"Economics is the study of how human beings coordinate their wants and desires, given the decision-making mechanisms, social customs, and political realities of the society (Colander, 2010)." Something that stuck with our team is the four main concerns of our economy, growth, inflation, business cycle, and employment. These concerns are what drive the political policies that are in place in our society. Our governments goal based on economic data of what is considered an optimal economy is to keep inflation at a rise of around 4% per year, employment stable at a 4% unemployment rate and to keep growth at a 4% target rate per quarter.

Remarkably captivating, but one item in particular dominated his attention was the calculation of inflation, and the significance of its relativity to the true growth versus decline of our country's economic health. The topic was timely, and derived its significance from the fact that the U.S. is currently facing a decisive dilemma surrounding this very issue. By understanding the dynamics of how these items are calculated, one finds his/herself seeking deeper insight into the practical application and further testing of these subscribed calculations - in hopes of grasping a firmer understanding; and if possible, adding some value to the circle of minds already wrestling with these concerns.

. Definition of interest rate: A rate which is charged or paid for the use of money. An interest rate is often expressed as an annual percentage of the principal. For example the amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets. Interest rates are typically noted on an annual basis, known as the annual percentage