Looking Forward While Being Pushed Back: How Accurate Were Economic Forecasts for Maine during the Pandemic?

Abstract

Economic forecasting is always a challenging process and how we understand the future often relies on what we have seen in the past. As COVID-19 case numbers began to increase, economies were forced to shutter and stay at home orders were implemented. In this paper, we compare our initial forecasts for output, employment, and tax revenue to actual values for 2020. Overall Maine’s economy was more resilient than our forecasts first predicted, with tax revenues far exceeding the initial projections. However, when the numbers are explored further it becomes clear that federal funds were a critical lifeline during turbulent times, and without this support the damage to Maine would have been far more severe.