This book seeks to demystify the macroeconomic terminology reported in the media, explain how past economic crises such as the global financial crisis occurred, and present macroeconomic analyses that have proven useful to businesses and improved shareholder prices. In order to meet these objectives a systematic approach or methodology to analysis is presented. The methodology focuses on five macroeconomic measures (gross domestic product, interest rates, inflation, exchange rates and exports). Analysis tools are provided for students and practitioners to do the heavy lifting. A widely used business technique called 'what-if' analysis focuses on creating before and after views of the five macroeconomic measures. Change is examined in terms of direction and size of movement. Due diligence is done on only the biggest macroeconomic mover. The costs to do analyses are far below more traditional approaches. The time required to learn and do the analyses is measured in terms of hours and minutes rather than day, weeks and months. The connections between macroeconomic analyses and business analyses are already established.
Imagine being able to pick up an article on a current economic crisis, such as sequestration or reduced government spending, going to your office, putting a few numbers into your consolidated-U.S. simulator, and viewing the dashboard of movements in gross domestic product, interest rates, inflation, exchange rates and exports for the U.S. and the EU. You notice a large drop off in exports that could mean you will fall short of meeting your quarterly international sales targets. Instead of becoming a crisis you have an opportunity to discuss options and identify the best possible choices to make. That is what this macroeconomic analysis methodology has already been able to do - get practitioners ahead of pending crises.
The six books in this Macroeconomic Analysis Series seek to ultimately reconnect macroeconomics analysis, financial analyses, and business decision-making. The books and supplemental materials allow practitioners to create 'what if' views of the economy and respond to them.