2012 Economic Forecast Southern Oregon University Economic Forecasting Team Professor Dan Rubenson.

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Presentation transcript:

2012 Economic Forecast Southern Oregon University Economic Forecasting Team Professor Dan Rubenson

Presentation Overview How We Got Here Forecast Methodology Economic Sectors and Assumptions Forecast Results Comparison with other forecasts Questions

What is Economic Forecasting?

Large scale deregulation of banks. Dotcom Bubble Repeal of the Glass- Steagall act Enactment of the Commodity Futures Modernization Act

2000 – 2005 Recession of 2001 Fed keeps rates unusually low Housing prices begin to soar Banks leverage 30-to-1

Provided over The American Recovery and Reinvestment Act of 2009 (ARRA)

2011 Zombies storm the White House Kelsey Grammer learns about love U.S. passes regulations making it illegal for wombats to engage in day trading.

Other Recessions

Methodology Forecasting Model: Fairmodel Created by Ray Fair, Yale University

Forecast Expert Judgment Model Economic Research

Housing Market Household Wealth Consumer Confidence

Housing Assumptions

Consumer Spending

Increased Demand Increased Production More Jobs Consumer Confidence Virtuous Cycle

Business Investment Interest Rates Consumer Demand

Business Investment

Employment

Employment Assumptions Consumer Spending Virtuous Cycle Long-Term Unemployment

Fiscal Policy Taxes Spending

Federal Assumptions – Fading stimulus – Congressional Paralysis – Partial Elimination of the Bush Tax Cuts at the end of 2012

State Policy No deficits Large budget cuts

State Assumptions $60 billion shortfall for Fiscal Year 2013 Layoffs, spending cuts

Monetary Policy Money Supply Interest Rate Federal Reserve Bank

Monetary Assumptions

International Economy

Crude Oil Transportation Costs Not the same as gas prices

Crude Oil Prices

Political Turmoil

Foreign Exchange Rate Dollar Appreciates Gains value Cheaper foreign goods U.S. imports more Dollar Depreciates Loses value Cheaper American goods U.S. exports more

Exchange Rate Assumptions Near future: ◦European debt crisis ◦Japan keeping Yen low US Dollar has been depreciating

International Uncertainty Europe: Possibility of Default

Forecast Results Recovering at a modest pace

Labor Markets

Interest Rates and Inflation

Housing Market

Business Investment

International Economy

Comparison

Comparison

Comparison

Forecast Team Jordan Lanigan Christian Patterson Paul Jenkins Jordan Highland Reneé DeLaunay Katherine Gohring Hiroshi Otani Professor Dan Rubenson

Questions?

From Southern Oregon University Economic Forecasting Team & Professor Dan Rubenson Link to the Forecast: