1. 2012 Economic Forecast Southern Oregon University Economic Forecasting Team Professor Dan Rubenson

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

3. What is Economic Forecasting?

5. Large scale deregulation of banks. Dotcom Bubble Repeal of the Glass- Steagall act Enactment of the Commodity Futures Modernization Act 1990 - 2000

6. 2000 – 2005 Recession of 2001 Fed keeps rates unusually low Housing prices begin to soar Banks leverage 30-to-1

7. 2007 - 2009

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

9. 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.

10. Other Recessions

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

12. Forecast Expert Judgment Model Economic Research

13. Housing Market Household Wealth Consumer Confidence

16. Housing Assumptions

17. Consumer Spending

18. Increased Demand Increased Production More Jobs Consumer Confidence Virtuous Cycle

19. Business Investment Interest Rates Consumer Demand

20. Business Investment

21. Employment

23. Employment Assumptions Consumer Spending Virtuous Cycle Long-Term Unemployment

24. Fiscal Policy Taxes Spending

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

26. State Policy No deficits Large budget cuts

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

29. Monetary Policy Money Supply Interest Rate Federal Reserve Bank

30. Monetary Assumptions

31. International Economy

32. Crude Oil Transportation Costs Not the same as gas prices

33. Crude Oil Prices

34. Political Turmoil

35. 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

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

37. International Uncertainty Europe: Possibility of Default

38. Forecast Results Recovering at a modest pace

39. Labor Markets

40. Interest Rates and Inflation

41. Housing Market

42. Business Investment

43. International Economy

44. Comparison

45. Comparison

46. Comparison

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

48. Questions?

49. From Southern Oregon University Economic Forecasting Team & Professor Dan Rubenson Link to the Forecast: www.sou.edu/econ/forecast