economic forecasting

economic forecasting extract from Britannica Online.

Prediction of future economic activity and developments. Economic forecasts, which range from a few weeks to many years, are widely used in business and government to help formulate policy and strategy. Macroeconomic forecasts predict the course of the aggregate economy and concentrate on variables such as interest rates, the rate of inflation, and the rate of unemployment. Forecasts of private consumption and investment, government expenditures, and net exports help government policymakers responsible for fiscal policy. For example, part of the justification for a change in taxes is a forecast of its economic effects. Microeconomic forecasts are designed to project the effects of change at the level of an industry or a firm. Most microeconomic forecasts begin with assumptions about the aggregate economy before focusing on the projected effects in the specific sector that is of interest. Manufacturers and retailers use such forecasts to formulate business plans such as those involving inventory, production levels, or hiring.

economic forecasting is one of 26,000 free short articles on Britannica Philippines

Find more information on economic forecasting. Upgrade to Britannica Online for more on economic forecasting.