Economic Growth in the USA: Econometric Model and Forecast
Abstract
Research background
Economic theory identifies many determinants of economic growth. The role of savings and budget deficits in stimulating growth remains a subject of controversy. This study provides a long-term analysis of the causes of economic growth using the most recent data for the world’s largest economy, while simultaneously examining the role of savings, budget deficits, and R&D expenditures in economic growth.
Purpose
Identification of the causes of economic growth and its forecast for the U.S. economy.
Research methodology
Data from the FRED database for the U.S. economy from 1960 to 2023 was used. A linear econometric model, the OLS method, and statistical tests were applied for the analysis. The forecast for the years 2024–2028 was conducted using the exponential smoothing ETS model and the constructed linear model.
Results
Savings, budget deficit reduction, and R&D expenditures had a positive and significant impact on economic growth in the U.S. However, they were not the only determinants of economic growth. Based on an econometric forecast, it was found that the U.S. economy may experience a slowdown in economic growth between 2024 and 2028.
Novelty
Empirical confirmation of theoretical growth models where savings and technology determine economic growth, incorporating an analysis of current data. It challenges the claims about the negative impact of savings on economic growth and the positive effect of budget deficits on growth. Additionally, it allows for the future development of the research tool used in the study for future analyses, studies and forecast.
© 2026 Tymoteusz Ochrymiuk, Kacper Grabowski, published by University of Szczecin
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