What are the different methods of macroeconomic prognosis?
Macroeconomic predictions include predictions about the whole economy of the country or even the world. Some such forecasting techniques are described as empirical: they look at the past relationship between different economic data and assume that the same pattern of the cause and consequence will continue. Other types of macroeconomic prognosis include work on the basis that anyone involved in the economy will be a rational decision.
The purpose of macroeconomic forecast is to look at the whole economy. This is unlike microeconomics that focuses on a specific market, such as the way in which demand and supply affect the sales and price of widgets or the labor market for widgets manufacturers. Macroeconomics is more complicated because it includes not only many individual markets, but also the effects of factors such as interest rates and taxation.
The simplest type of macroeconomic prognosis is theoretical models. This work on the basic rules that are considered true. For example, by one such "rightIdle ”could be that if the interest rates decrease to half, due to lower mortgage installments, it will increase to half a half -decrease, leading to 10 percent higher sales of goods in the economy with rising prices by five percent.
The more complicated variant of the macroeconomic prognosis is called empirical predictions. This includes a view of real past data and conclusions to evoke. For example, Forecaster could look at changes in income tax and change in the past in the past and try to establish a common relationship. This will not necessarily be what can be expected from purely theoretical perspectives. This past relationship can then be used for future predictions. Such models differ immensely in complexity depending onHow much data is used and how many factors are charged.
Probably the most complex type of macroeconomic prognosis is those that are categorized as micro -borne, such as dynamic stochastic general equilibrium models. The micro -borne prognosis includes the division of the economy to the smallest possible parts, preferably for each person or an organization that takes decisions, such as consumers who decide what to buy, manufacturers who decide where to obtain supplies or government decisive on the turnover tax. This technique then involves elaboration that would most serve their own interest, whether it means that consumers gain value for their money, manufacturers trying to increase profits, or government trying to maximize tax income without injuring the economy. Economists then create this into a complicated model that can predict the effects of a particular change when each party acts in the most rational way.