Economic analysis is an investigation into the health, trends and performance of a given economy by studying factors such as GDP, unemployment levels, inflation rates, consumption patterns, trade data, and more. In addition to revealing insights that inform decision-making and shape economic policies, this type of research also helps evaluate business opportunities and make accurate predictions about future trends.
There are several different types of economic analysis. Some focus on specific industries or business sectors, while others examine broader economic trends. Often, a mix of deductive and inductive methods is used for the best results.
One of the most common tools for economic analysis is a cost-benefit analysis, which compares the potential impact of a project against its projected costs. This is often done before or after a project takes place (ex ante or ex post).
Other tools for economic analysis include macroeconomic modeling, supply and demand curves, and risk and opportunity assessment. Econometric analysis is a subset of economic analysis that uses statistical methods to test theories and predict behavior. This type of research can be particularly useful when evaluating the impact of large, complex public or private projects.
To conduct economic analysis, you must start with a strong understanding of the literature on your topic. This will help you identify key issues and build a framework for your work. Once you’ve established your research question, it’s important to stick to it throughout the writing process. This will prevent you from veering off course or wasting time.