The economist typically considers risks (i.e., events or conditions that can cause the result to vary from their initial estimates).
Everything from macroeconomic,[2] microeconomic,[3] market data from the future,[4] machine-learning (artificial neural networks),[5] and human behavioral studies[6] have all been used to achieve better forecasts.
Governments and businesses use economic forecasts to help them determine their strategy, multi-year plans, and budgets for the upcoming year.
[8] The IMF publishes the World Economic Outlook report twice annually, which provides comprehensive global coverage.
[10] There are also private companies such as The Conference Board and Lombard Street Research that provide global economic forecasts.
Moderate growth is expected in North America, the Middle East, and Asia, with rates projected at 3.6%, 3.5%, and 3.4%, respectively, while European exports are anticipated to grow by only 1.7%.
[14] The U.S. Federal Reserve Board of Governors members also give speeches, provide testimony, and issue reports throughout the year that cover the economic outlook.
[17] Large banks such as Wells Fargo and JP Morgan Chase provide economics reports and newsletters.
[18][19] The European Commission also publishes comprehensive macroeconomic forecasts for its member countries on a quarterly basis - Spring, Summer, Autumn and Winter.
[21] However, it has been found that the entry and exit of forecasters can have a substantial impact on the real-time effectiveness of conventional combination methods.
The World Bank provides a means for individuals and organizations to run their own simulations and forecasts using its iSimulate platform.
[24] "The OECD also found that it was too optimistic for countries that were most open to trade and foreign finance, that had the most tightly regulated markets and weak banking systems" according to the Financial Times.
[27] Additionally, political events such as terrorism have been shown to influence the accuracy of both expert- and market-based forecasts of inflation and exchange rates.
[28] This highlights the range of external factors and biases that should be considered when evaluating the accuracy of forecasts and making informed decisions.
The financial and economic crisis that erupted in 2007—arguably the worst since the Great Depression of the 1930s—was not foreseen by most forecasters, though a number of analysts had been predicting it for some time (for example, Stephen Roach, Meredith Whitney, Gary Shilling, Peter Schiff, Marc Faber, Nouriel Roubini, Brooksley Born, and Robert Shiller).
The UK's Queen Elizabeth herself asked why had “nobody” noticed that the credit crunch was on its way, and a group of economists—experts from business, the City, its regulators, academia, and government—tried to explain in a letter.