Future Economic Predictions
Economic forecasting is all around us every day. You only have to turn on the television or pick up a copy of a national newspaper to learn what the experts think will happen in the economy. Some forms of forecasting come from governments and their agencies, others from financial institutions and independent analysts working in the private sector.
But how do analysts make these predictions? Most will take several common factors into consideration when predicting what the future will hold. These include current trends, investor confidence and stock market activity. Larger events such as wars and famines also influence economic predictions, as do elections and new trade agreements.
One of the most unwelcome economic predictions is recession or stagnation in certain markets. For example, in the United Kingdom, soaring house prices have caused some analysts to predict a property market crash in the coming years.
Analysts in the United States generally agree that the economy has a fairly standard pattern. The market is thought to grow healthily for six to ten years, after which time a recession or low period is inevitable. The point at which the recession begins is known as a peak and the point at which it ends is a trough. Most economies will go through multiple peaks and troughs in a person's lifetime. For example, older people often recall the “Great Depression” of the early 1930's in which a worldwide recession halted investment and virtually crippled Western economies.
So how do economists know when a recession is in place? The truth is that no one truly knows. The peak is impossible to pinpoint as figures for a time period of less than six months are difficult to analyze. Often economists will argue about the event that started a recession when there is no clear answer.
However, one factor that does help analysts indicates troubling times for the economy is a decreasing GDP figure. GDP, or Gross Domestic Product, is the value of all commodities in a country in one year. This is often used to determine the health of an economy and can help the government to work at preventing severe recession.
For more infomation on economics choose from the list below. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Banking - Business Finances - Economics - Insurance - Investing
Major Purchases - Personal Finances - Stock Market - Taxes
|
