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Essay on Macroeconomic Forecast
The traditional role of the business economist has been to evaluate the current economic environment and economic prospects for management, the corporate chief executive, and the board. Often, the information needed is broadly comprehensive but not numerically precise. Management wants to know when the turnaround in the economy will occur, approximately how rapid economic growth will be, what the impediments to faster growth or the forces that cause a more rapid expansion will be, what the likely impact on inflation rate will be, what activity in major industries will be, and what interest rates will be. Such information, sometimes provided by the economist's office or an outside consultant, is now frequently taken from the forecasts of the econometric forecasting services. With the greater availability of economic forecast data and with greater understanding of what the statistics mean, even this broad background calls for more precision and more detailed information than it used to. As we have noted, economic literacy has increased in general and many business executives have been exposed to advanced economics in their MBA training. The forecast meetings described above are clearly useful to provide the desired economic background (Michael, & Smolen, 1992).
How is this information used by the corporation? Often, it is factored into business decisions in an informal no empirical way. It serves as a basis for business planning. It relates to the company's public position on current policy issues. This information deals only broadly with the company's specific business or product lines for which typically the marketing and planning departments have primary responsibility......
