Political  Calculations

The strongest force affecting future GDP is inertia.

At least, it is if you go by our "modified limo" approach to forecasting future GDP.

Here, we took a forecasting approach originally developed by Steve Conover, which he called the "climbing limo" method, and adapted it to produce a more accurate projection of GDP in the near term (the next quarter) than what the climbing limo method delivers (although to be fair, the climbing limo method was developed to look three quarters into the future - there's a lot that can happen in the meantime to sway the economy off the course that method would forecast!)

Now that the GDP data for the second quarter of 2011 has been finalized, we can now project where real GDP will be in 2011-Q3, using the tool we developed to forecast the next quarter's GDP.

The graph below visualizes the forecast presented by our tool which you can see by clicking here:

Real GDP vs Climbing Limo Forecast vs Modified Limo Forecast, 2003 - Present (as of 2011-Q2's Third Estimate of GDP)

In reality, the target value of $13,299.8 billion in constant 2005 U.S. dollars that we've projected for the inflation-adjusted value of GDP in the third quarter of 2011 represents the midpoint of the forecast range into which we expect GDP to be in 2011-Q3.

Political Calculations

Political Calculations is a site that develops, applies and presents both established and cutting edge theory to the topics of investing, business and economics.

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