Todays WSJ had the annual forecasts of the country's top rated economists. I have often wondered exactly how an economist puts together a precise GDP forecast. Love him or hate him, Kudlow has been exception at this. Kudlow and Brian Wesbury were saying in the spring, at Dow 7500, that we were going to have huge GDP growth in the latter part of 03, I am just curious as to what exactly they are looking at. (I think money supply is a major input).
Stock Market is a huge part of GDP forecast. Economists can't predict well market's bubble and so can't predict well GDP in that case, but they can predict well recovery after a crash so GDP forecast is then more reliable in that case. Perhaps in 2005 I will begin to work on economic forecast model since I have a reliable stock market model and since stock market impacts hugely economics I should get more reliable economic forecasts also.