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Recognizing and forecasting the recession

According to the information retrieved from Alfred Economic Data (2017), forecasting can be viewed as a method through which prediction and estimates for a future event are conducted to provide future predictions that can be relied upon. Furthermore, forecasting is used to provide essential information concerning a potential future event and the anticipated consequences that would be faced by an organization or a nation. Forecasting is an essential tool that can be used to provide statistical data that is used to predict trends in the market, population, and anticipated economic development.

On the other hand, a recession is a huge slowdown or rather a significant contraction in the economic activities. When a nation faces a considerable fall in the general spending, this scenario would definitely lead to a recession. Besides, when an economic slowdown is persistent, a great impact on the economic conditions would be evident, while in this situations, the economic indicators such as corporate profit, gross domestic product, and employment would fall. In response to a prolonged recession there would be a huge mess in the entire economy, and most probably, the trading partners would face a significant effect too. The general economy would react by having loosened monetary policies due to increased supply of money in the economy. Various aspects, however, can be used to tackle the menace.

Data problems sometimes prevent us from forecasting and even recognizing when a recession begins. To understand the real situation in a nation's change in the general productivity, it would be imperative to understand what data is. Data is a collection of facts and statistic which are used to generate information about a specific study or research. While forecasting means predicting a future after observing some trends and cycles from data and information over a period of time, a recession would be illustrated a slimness or depression that a notion, economy of business face characterized by reduced trade and industrial activities.

Another major aspect that cabs us from understanding the dynamics and projection of growth in a nation, is tracing the fall of Gross Domestic Product and the Gross Domestic Income. While accurate data may result from perfect information which is a true presentation of reality, the information obtained in the same, or different studies under the same sector, may vary due to either poor research analysis, poor tools of correcting data, or lack of scientifically proven procedures to dictate research methodology. If data have some errors or it is inaccurate then it would be definite that the outcome shall give wrong information.

The great recession in US economy was experienced in 2007 to 2009. During this period, the economic situations faced significant shifts of up and down movement in the price of various commodities and services. The recession was so severe and it caused a huge wave on the stability of the United States economy. Through a study of the forecasted data series of the periods preceding and succeeding the recession period, it is possible to determine and forecast the beginning of the recession and the actual factors that contributed to this menace.

National Bureau of Economic Research (NBER) reveals that the United States’ recession period was observed to start in the year 2007 December and toke roots...