Happy New Year Some forecasts about the economy for 2009

Based on no formal models whatsoever, here are some forecasts for the economy:

• Roughly, the stock markets will remain flat for the next year. There will be dips and rises, but overall they'll finish 2009 about where they are now.
• Oil will be about $50/bbl. (I'd like to add +/- 100, but that doesn't work, does it?).
• Unemployment in Canada will be 6.9 - 7.5%.
• The Canadian year-to-year annualized rate of inflation (November 2008 to November 2009) will be 0.7% -  0.9%, which is pretty close to zero when we take into account the upward biases in the CPI.
• Housing prices will not rebound in the US, overall, and they will drift slightly downward in Canada.
• Nominal interest rates will remain low.... very low.... as central banks continue to try to pump up aggregate demand.
• Deficits will rise everywhere. Part of this will be an acceptable result as automatic stabilizers kick in. Part of it will be disastrous gubmnt involvement in the economy with bureaucrats and politicians trying to act like CEOs. I fear humans, and especially politicians, have been hard-wired with an overdose of hubris.
• Manufacturing will continue to drift away from central Canada and the upper Midwest US.
• The US price of a Cdn dollar will be 91 cents.

Comments

[Nick Rowe]

OK John, at Worthwhile Canadian Initiative we have accepted your (implicit) challenge, picked up the gauntlet, and we now have the battle of the Canadian economics blogs. (Click on my name for the link). I have tightened the rules somewhat (OK, I made up some rules, since you didn't actually state any). Would you (or any of your readers) like to post your forecasts according to my rules?

[Nick Rowe]

Sorry. Here's the link.

[Nick Rowe]

Sorry again. Trying a third time to post the link: http://worthwhile.typepad.com/worthwhile_canadian_initi/2009/01/canadian-economic-forecasts-2009-make-yours-now.html