Macroeconomic Forecasts

Inforum produces forecast semi-annually for its sponsors using the LIFT model. This is both an industry forecast as well as a macroeconomic forecast. The forecast is for the United States on an annual basis to the year 2030. These forecasts include such macroeconomic variables as:

• GDP
• Inflation
• Wages
• Unemployment
• Total Imports
• Total Exports.

Unlike other macroeconomic models, the Inforum LIFT model need not impose GDP or other control totals on the industry detail. Instead, it determines macro aggregates by summing industry-specific results. Total exports, for instance, is the sum of exports of various products, such as steel, motor vehicles, and semiconductors. Each product's exports are determined by industry-specific prices and demand. In LIFT, as in the actual economy, the micro economy has macroeconomic implications. An increase in auto exports increases total exports. A steel tariff increases the average price of aggregate imports. Likewise, an improvement in agricultural labor productivity leads to a higher level of real GDP, while a decrease in the profitability of airlines automatically decreases total profits. The Inforum approach of an integrated, structural model permits feedback from the industry detail to the macro aggregate and provides a rich simulation environment for analyzing the industrial consequences of economic changes.   For an in-depth description of the LIFT model, see "The LIFT Model" (PDF), by Douglas Meade.