ECO/372 – Economic Forecasting
Developing a list of powerful economic resources to gather historical economic data and economic forecast data is crucial for proper decision-making. Executives, analysts, investors, or anyone can benefit from the historical trends and patterns within the macroeconomic environment.
Forecasting factors relating to market size and growth, private consumption, investment patters, GDP by sector, international trade, and foreign direct investment are all vital market indicators that are used to recognize market behavior.
EIU Market Indicators and Forecasts is a viable resource for gathering historical data and economic forecast data. This resource is useful because it covers demographic, consumption, and industry data from 60 different countries. The data has value since the content dates back to 1990, and the forecast data always covers the next five years of projections at any point in time.
When researching forecasting factors contained in this resource, qualitative macroeconomic indicators for private consumption include the private consumption per head, private consumption as a percentage of GDP, and change in real private consumption over the previous year (“Market Indicators & Forecasts”, 2014).
The EIU also covers a vast number of resources that a country has or potentially can have. The EIU can be used to forecast data, compare markets in other countries, and is vital information for a potential investor. Their services portfolio has information on: world investment services, city data, country risk model, country data, and market indicators and forecasts.
Pretty much everything a person would need to know to make a viable business decision is in the EIU’s reports. This tool also contains vital information on financial services, automotive, energy, healthcare and pharmaceuticals, technology, consumer goods, food, beverages, tobacco, transport and travel and tourism, consumer demographics, income, expenditure and housing, risk ratings, covering country credit risk, and business operational risk ratings.
Moody’s Analytics is a valuable resource for gathering economic data, since they provide extensive data at the national and sub-national levels in 180 countries (“Moody’s Analytics,” 2014). Since Moody’s Analytics covers so many demographic areas, the result is better market analysis, and a large scope of trends that will work within the various regions.
Management must look at past trends to see what the future holds and plan accordingly. Moody’s Analytics also looks at alternative pathways to further protect businesses from economic ruin. Decision makers can monitor the current course of action and make changes if necessary. It is like having a safety net in place.
Moody’s Analytics is known for their accuracy because of the way they monitor, check and review the data they receive. A solid checks and balance with integrity keeps everyone at Moody’s Analytics producing reliable information.
Moody’s Analytics is a qualitative source to reference because the collection of research is compiled over long periods of time, and consequently is sufficient for long-term planning. The financial industry uses Moody’s Analytics for insight into their interpretation of the direction of current market trends.
Another example of a good economic resource is the United States Federal Reserve website. The Federal Reserve website has many attractive features for research including research by field. This feature allows a researcher to look up information based on categories like Financial Economics, Macroeconomics, and International Economics.
The home page of the Federal Reserve displays recent developments and features along with press conference footage from the Federal Reserve’s Chair Janet Yellen. An “Economic Research & Data” tab is what a user would click to go to the economic research section.
A second important feature of the Federal Reserve website is the ability to review each economist’s qualifications and publications individually. By providing the economist’s qualifications a researcher can know who the article was written by and how qualified they are. As the website states, “Economists at the Federal Reserve Board conduct innovative research on a broad range of topics in economics and finance” (“Board Of Governors Of The Federal Reserve System”, 2014).
While there are many outlets of information that can influence success in economic forecasting, the resources listed above should be considered staples in any decision maker’s playbook. When referencing these valuable resources, it is important for individuals to pay close attention to whether or not the data is seasonally adjusted for inflation or other factors that can result in changes in the data over time. Market indicators are most useful when the source of the data is credible and has been scrutinized carefully by industry experts (Colander, 2013).
Board of Governors of the Federal Reserve System. (2014). Retrieved from http://www.federalreserve.gov/econresdata/default.htm
Colander, D. C. (2013). Economics: Principles, Problems, & Policies (McGraw-Hill Series in Economics) – Standalone book by McGraw-Hill Education
Market Indicators & Forecasts. (2014). Retrieved from http://secure.alacra.com/cgi-bin/alacraswitchISAPI.dll
Moody’s Analytics. (2014). Retrieved from http://www.economy.com/products/data
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