U.S economy Research Paper Example | Topics and Well Written Essays - 2500 words

U.S economy - Research Paper Example nce, economic indicators illustrate when the economy falls like in a recession and when the economy grows like during economic development (Griffis, ch.1). This paper will predict the economic future of U.S economy one year from now. In economics, economists develop laws of economic behavior based on the presumption that states do not count, but markets do. In economics, the most important issue is whether the presumptions generate a successful proposition that can be empirically tested and proven to be invalid or reasonable. From this perspective, the major challenge in the economic forecast is the neglect of the function of the state in economic concerns specifically international economic growth. In fact, national activities and policies are significant for economic results (Gilpin, R. & Gilpin, J. 61). Another challenge encountered when making economic forecast is the concept of weak efficiency. Weak efficiency is a theory that assumes that past forecasts play a critical function in establishing present predictions (Dovern 2). In addition, economists are less conversant with the regional cycles and trends hence the problem of predicting changes in these areas. Moreover, the error of incorrect revenue is anot her element that can create a problem in producing accurate forecast on the state of the economy. Also, data revisions pose a challenge to forecasts because when there is a structural change in the economy, the forecasting models need to be changes which may consume much time (Higgins 22). State and national economic predictions assist forecasters to generate an approximation of anticipated revenues from fundamental tax ground on the current price. In addition, other professionals in the budget department use the predictions to plan an expenditure budget and provide recommendations for the next fiscal period (Forsythe & Boyd, memo 3). The economic indicators do not impact the economy in the same manner. Generally, there are three types of economic