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Macroeconomic Forecasts
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ABSTRACT I have been challenged to compare the forecasts of three different institutions. Once the forecasts were assembled I researched the reasons why there may be differences between the institution’s forecasts. I have also discussed the implications of these forecasts on three planning issues within the organization. My findings and recommendations of changes to these planning issues in order to minimize potential risks or maximize opportunities follow in the paper below. Macroeconomic Forecasts Factors such as inflation, unemployment, consumer spending and the overall level of output in the economy are covered by forecasts such as those put out by the government and financial institutions. Predictions are made and published regularly by governments throughout the West and private sector institutions. The results of the forecasts are in turn used as inputs to significant policy decisions, such as setting interest rates and deciding monetary policy. Additionally commercial businesses are also influenced by these forecasts regarding the scale of their commercial operations. I have gathered three separate forecasts published by three different institutions and compared the results of these forecasts. The forecast findings are as followed: Real GDP 2003 Annual 2004 Annual Source 2.5 4 The Conference Board Inc 2.7 4.2 Wachovia Economics Group 2.5 3.6 Congressional Budget Office Unemployment Rates 2003 Annual 2004 Annual Source 6.0 5.9 The Conference Board Inc 6.0 5.5 Wachovia Economics Group 5.9 5.7 Congressional Budget Office CPI Inflation 2003 Annual 2004 Annual Source 2.3 1.9 The Conference Board Inc 2.3 2.5 Wachovia Economics Group 2.3 2.2 Congressional Budget Office 3 Month Treasury Bill 2003 Annual 2004 Annual Source 0.99 1.36 The Conference Board Inc 1.03 1.9 Wachovia Economics Group 1.4 3.5 Congressional Budget Office 10 Year Treasury Note 2003 Annual 2004 Annual Source 4.14 4.84 The Conference Board Inc 4.21 5.3 Wachovia Economics Group 4.4 5.2 Congressional Budget Office Although the above forecasts are very similar, there are slight differences in what they reported.
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