Examine a scenario analysis in a forecast.
- [Lecturer] I'm in the 04_03_Begin file,…from the Exercise Files folder.…Ed is concerned about tax reform in Washington.…His boss has asked him to analyze…three possible scenarios that might occur…if tax reform moves forward.…And in particular, Ed's firm is trying to understand…the impact this might have on REIT flows from investors.…So, in the first scenario,…Ed expects that the top marginal tax rate…would fall from 39.6% to 35%.…
This reduced tax rate should boost GDP growth…from their current forecast of 1.8%…to a new level of 2%.…In order to offset this tax reduction,…the long-term capital gains rate would be raised to 20%.…In scenario two, Ed is forecasting…that the top marginal tax rate might fall…all the way to 30%.…This in turn would lead to GDP growth of 2.3%,…but again, long term capital gains rates would have to rise,…and in this case, they would increase to 25%.…
Finally, in scenario three,…the top marginal tax rate would fall even more,…in this case to 25%, while GDP growth in this case…would rise to a sizzling 2.7%.…
Professor Michael McDonald demonstrates how to harness the wealth of information available on the Internet to forecast statistics such as industry growth, GDP, and unemployment rates, as well as factors that directly affect your business, like property prices and future interest rate hikes. All you need is Microsoft Excel. Michael uses the built-in formulas, functions, and calculations to perform regression analysis, calculate confidence intervals, and stress test your results. He also covers time series exponential smoothing, fixed effects regression, and difference estimators. You'll walk away from the course able to immediately begin creating forecasts for your own business needs.
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- Understanding big data and economic forecasting
- Predicting values with regressions
- Analyzing economic trends and economic cycles
- Using fixed-effects regressions and binary regressions for forecasting
- Assessing the accuracy of an economic forecast
- Using scenario analysis