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Local expert: When it comes to the economy, the last decade didn't go as expected

CENTER VALLEY, Pa. - This is the time of year when we look back and take stock of all that was. When it comes to the economy, the past decade-not just the year-didn't go quite as expected.

At the start of what turned out to be the longest recovery in American history, economists made a lot of predictions, and a lot of those ended up being wrong. 

"Basically we are 0 for 3," according to Kamran Afshar, an economist with DeSales University. 

Specifically interest rates, inflation, and the unemployment rate.

"How do you predict something that going to happen in the future? You look at the past," Afshar said.

But the past could not account for the Federal Reserve keeping rates at unusually low levels. 

"They have expanded huge amounts of money into the system. Something they didn't even do during the Great Depression," Afshar said.

Inflation, during this recovery, never increased up to the Fed's target of 2%.

Afshar says globalization - think online commerce - has made it hard for inflation to bloom.

And no one could have imagined 10 years ago a scenario which would have unemployment below 4 or 5%. But the longest recovery in history, partnered with a decrease in population, made that a reality.

"So everybody is being hired, now they need new people and population growth is much slower," Afshar said.

The one thing they got mostly right was the GDP. 

"At the very least they are trending absolutely accurately," Afshar said.

The why might be hard to pin down, but Afshar points to a decade unlike any we've seen before. Rapid technology and globalization upended what we thought we know about the economy. 

"You can buy something from China and 5 days later it's at your house," Afshar said.

And the unexpected drop in oil prices - starting in 2006 - also threw predictions way off. 

The same rapid technology that threw the decade off should help make the next decade more accurate. Artificial Intelligence will allow economists to updated equations in real time.

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