Winner of the Annual Blue Chip Economic Forecasting Award

U.S. and Regional Economic Forecasting Service:
Providing Accuracy and Reliability

• Flexible and easy-to-simulate models
• Web access to all components of the service
• Comprehensive coverage of all 50 states and major metropolitan areas
• Regularly updated variables and equations
• Award-winning models delivered directly to clients
• Complete current and historical database

In today's fast-changing business and political environment, econometric forecasting has become a crucial tool for governments, corporations, and financial institutions. American Economics Group, Inc. (AEG) offers the most clear and comprehensive econometric models on the market today, enabling clients to assess the risks and opportunities they face in an uncertain future.

Consider All the Dynamic Variables
Using modified multiple regression analysis to estimate share equations, AEG's full macroeconomic model includes more than 3,000 equations. We forecast the most important economic indicators including interest rates, inflation, employment and unemployment, housing starts, motor vehicle sales, and other consumer and capital spending, net exports and the value of the dollar, personal and corporate income, and taxes.

The regional models include nearly 75 additional equations for each state, which are updated quarterly. We have specifically designed these models to predict the shifts in a state's employment in manufacturing and other primary industries based on changes in relative wage rates and other regional variables. But even if relative wage rates don't change, firms might still shift production from high-cost to low-cost locations given certain economic conditions—a strong or overvalued dollar, tight monetary policy, low profit margins, low capacity utilization rates, or declining demand for the product.

A completely accurate forecast must consider all these interacting variables. AEG's regional models focus on shifts within the U.S., while the macroeconomic model bases its forecasts on key policy variables including monetary and fiscal policy, foreign developments, exogenous changes in productivity, and energy prices. This dynamic link between the models is one of the key strengths of AEG's forecasting service.

Rely on Our Stellar Track Record
The AEG macroeconomic and regional modeling system has been developed by Dr. Michael Evans, one of the nation's foremost econometric forecasters and 1999 recipient of the Annual Blue Chip Economic Forecasting Award for the most accurate macroeconomic forecasts of the previous four years. Dr. Evans has authored eight books and countless articles on economic and fiscal issues. With nearly 40 years of macroeconomic forecasting experience, Dr. Evans, together with his AEG team, will ensure that this forecasting service is accurate and reliable.

Use AEG Forecasts or Run Your Own Simulations
Now you can benefit from Dr. Evans's expertise. As a subscriber, you can log on to the AEG website and access the five-year quarterly forecasts for all 50 states; a summary of each state and major economic region; a monthly summary of the U.S. macro standard and alternative forecasts; all historical and forecast variables; and our newsletter, the AEG Weekly Economic Forecaster.

Most importantly, AEG will provide subscribers with the U.S. macroeconomic and regional models themselves—something no other company offers. You can download the macroeconomic and regional workspaces and databases in EViews and run simulations on your own computer, using your own assumptions. By making all our equations available, we've taken the mystery out of which variables are important or what form of equation generates each prediction.

Choose the Right Model
Responding to client requests for smaller, more manageable models, AEG offers the following choices:

Basic Macro Model: This model contains nearly 50 stochastic equations that focus only on the key relationships of the economy. This allows users to conduct simulations easily by inputting their own macroeconomic assumptions about key policy variables such as changes in federal reserve policy, the economic impact of upcoming tax legislation, future changes in the stock market, major changes in energy prices, and fluctuations in the value of the dollar. The model's restricted size means users can easily trace the impact of these changes.

Expanded Macro Model: This more detailed model contains nearly 150 stochastic equations but has less simultaneous interaction. So users can effortlessly change forecasts for a given industry or put in their own industry assumptions (for example, production of fabricated metal products depends on housing, nonresidential construction, consumer purchases of household durables, and other macro variables, but not vice versa). This model contains all the necessary detailed data inputs for the regional modeling system: employment and industrial production for 2-digit manufacturing industries; employment, wage rates, and wages and salaries by 1-digit industries; detailed components of consumer spending (such as newspapers, tires, domestic airline travel); and detailed components of capital spending (such as office furniture, construction machinery, instruments).

Individual State Models: Most AEG state models contain nearly 75 stochastic equations. Each model has equations for manufacturing employment by 2-digit industry and non-manufacturing employment by 1-digit industry. It also has implicit wage rates by 1-digit industry (used to calculate wages and salaries), detailed components of personal income, relative wage rates, total employment and unemployment by state, and unemployment by metropolitan area. AEG can tailor any state model to a specific client need.

Combined Regional Models: AEG offers flexibility for subscribers who want to simulate more than one state or a particular group of states. With a customized group model, you can simulate all states within a region, specific states within a region, or all 50 states simultaneously. A group model can help you determine how changes in key macroeconomic variables would affect changes in employment and income among the states within their group. The model for all 50 states includes balancing algorithms to ensure that the sum of all employment, income, unemployment, and other variables equals the national totals.

Why Clients Prefer AEG's U.S. and Regional Forecasting Service

Web-Based Products
All the components of AEG's forecasting service are available on the Web, so you can select precisely the amount of information you need. Say good-bye to forecasting books with hundreds of pages you don't have time to read. Just print the documents you want in PDF format or let us know the part you want, and we'll mail it to you.

Accuracy
With nearly 40 years of macroeconomic forecasting experience, Dr. Michael Evans brings a stellar track record to this service. He and his staff will carefully check and revise all variables and equations to ensure that the forecasts are in line with the most recent data.

Comprehensiveness
The AEG regional modeling service contains models of all 50 states, with predictions of 2-digit manufacturing and 1-digit non-manufacturing employment wherever data exist. We also predict unemployment rates for all metropolitan areas. If you need detailed forecasts of tax revenues, you can link the outputs from these models directly to revenue data.

Easy Simulation
You can simulate a straightforward 50-equation macro model and trace the impact of changes in key macroeconomic policy variables. Then enter these changes into the expanded macro model, individual state models, or regional models. You change precisely what you want to change—you don't have to plow through a model with thousands of equations unrelated to your project.

Flexibility
You can solve one state model separately, combine the models in any given region, or solve all 50 state models simultaneously. You can also solve the basic and expanded macro models separately or apply the baseline assumptions—standard, optimistic, and pessimistic—directly to the state and regional models.

No Black Boxes
AEG makes all the equations available to subscribers. You're not left wondering which variables are important or which equations are used to generate predictions.

EViews is a windows-based economic analysis software package of Quantitative Micro Software.