Econometric research · Forecasting

US Technology Sector GDP Forecast

A production-function approach to estimating the historical performance and future outlook of US technology-sector GDP using structural and inertial forecasting methods.

Date: Aug 2024 - Aug 2025 Tools: Excel, EViews, R, Powerpoint, Word Role: Independent Researcher Mentor: Dan Hamilton
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Research question

How might US technology-sector output develop through 2029?

Sector scope

NAICS 334: Computer and Electronic Products Manufacturing + NAICS 51: Information

Forecast horizon

Historical performance through 2024, forecasts for 2025-2029

Research question and scope

This project examines how capital, labor, and sector-specific dynamics contribute to US technology-sector output. The sector is defined as an identity of NAICS 334: Computer and Electronic Products Manufacturing plus NAICS 51: Information.

The analysis combines historical review, a theoretical production function, and competing forecasting approaches to compare how different assumptions shape the technology sector's outlook.

Method

  1. Historical analysis
  2. Theoretical framework and literature review
  3. Data selection and analysis
  4. Model development and causal inference
  5. Multi-equation model specification
  6. Inertial and structural forecasting
  7. Competitor model comparison
  8. In-sample error analysis
  9. Combination forecasting

Model Synthesis

The structural model reinforced the central role of capital and labor as driving forces in the technology sector's production function. Inertial models are fast and often provide reasonable forecasts, but they do not capture the nuanced dynamics represented by the structural model.

This model includes 3 possible outcomes: optimistic, baseline, and pessimistic scenarios, each reflecting different assumptions about capital, labor, and sector-specific dynamics. This set allows for clear bracketing of potential future developments in the technology sector, giving the clearest picture of what may lie ahead.

Model structure

Multi-equation model flowchart

Flowchart of the multi-equation technology-sector GDP model, showing identity, stochastic, and exogenous variables connected by positive and negative relationships.
The flowchart shows how the model connects technology-sector GDP identities, stochastic variables, exogenous inputs, and the relationships used in the forecast.

Primary visual

Technology-sector GDP scenarios

Value basis
Display
Date range 2019-2029
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Selected values
Year Base Pess. Opt.

Real GDP levels, with base, pessimistic, and optimistic scenarios. Growth rates are calculated year over year from the level data.

Downloads

Project files and datasets

Access the original modeling workbook, supporting data, presentation, and full project report.

Primary dataset Supplemental dataset PowerPoint View PDF report