Accounting for the Emotional Component
When developing macroeconomic forecasts, how do you model mood? Many economists focus on things they can easily measure (or at least try to) and plug them into complex computational machinery to develop economic forecasts. Since the inputs and the numbers tend to be similar, we get consensus estimates that sound similar from one economist to another.
Current ballpark forecasts call for economic growth to be roughly 2% to 2.5%, whether the economists are at private firms or within the Fed. Some forecasts, of course, are higher or lower, but basically, they use quantitative methods....482 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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