How would you characterize our ability to forecast economic activity? When are our forecasts most likely to be inaccurate, and why is this a problem?

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Pretty crappy. But you should be able to discuss some examples from the lecture notes. We are most likely to be inaccurate when the economy is undergoing a major change from its recent trend behavior. This is a problem because we are most likely to be inaccurate in forecasting just when policy intervention is most needed.

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