IrishCentral sat down with economist Jim O’Sullivan this week to ask his opinion on the economic outlook in the US and Ireland for 2014. According to MarketWatch, he is "the best high-frequency economic forecaster in America." He was MarketWatch Forecaster of the Year for 2004, 2006, 2008, 2011, 2012 and 2013.

Jim is an Irish American who attended Trinity College in Dublin where he completed a BA in Economics.

Looking to the year ahead, what is the outlook for US Economy?

The economy should continue to recover this year. That is not to say everything will be fully back yet to where it was in 2007, before the financial crisis, but we have come a long way, despite a lot of lingering headwinds. The crisis led to an 8.7 million decline in employment, making for the worst U.S. recession since the Great Depression, but employment is now up 7.6 million from the low. Of course, because of labor force growth, employment also needs to grow over time, so we need to do better than just back to where we were. A lot of people are still out of work, but the trend in employment growth has been around 180,000 per month recently. We expect acceleration to around 200,000 per month in 2014. While far from booming, that represents progress. The glass is half full and filling rather than half empty and emptying!

As for GDP, the trend for most of the recovery has been for only around a 2-2.5% growth rate, but there was a pickup to over 3% in the second half of last year. We expect that 3%-plus pace to continue in 2014.

What are the opportunities for SMEs (small and medium enterprises) in 2014?

Realistically, there is not going to be a sea change in 2014. More than four years into the recovery, if we have not seen a boom by now, chances are we are not going to see one. That said, the economy is slowly but surely improving. The improvement has benefited small and medium as well as large firms. Construction firms in particular, many of which are relatively small, benefited as the housing sector belatedly began to recover. Commercial construction was also slow to recover but appears to be picking up now.

What are some risks that could dampen the economic recovery?

There always risks! Certainly, a loss of confidence in financial markets can become self-fulfilling to some extent. Markets have been rattled a bit recently by concerns about emerging markets. There is also the risk that markets could over-extrapolate a couple of stronger readings for inflation, causing interest rates to rise more rapidly than justified by the solid-but-not-spectacular pace for growth. Conversely, there are also upside risks. Monetary policy remains extraordinarily accommodative, the drag from fiscal policy will fade dramatically this year, and accelerating growth can effectively feed on itself – with increased spending leading to increased employment, leading to increased spending, and so on. Personally, I think the risks are more on the upside than the downside this year.

What advice would you have for middle class earners? Pay down debt and save more?

I'll preface my answer with the caveat that our firm advises institutional clients on broad macro trends. In turn, they make their own decisions on how to invest. We are not financial advisors. But I would think it is generally good advice for most people to save more, using those savings to either make risk-appropriate investments or to pay down debt. I'll add that there is much more of a case for paying down expensive credit card debt than historically cheap mortgage debt.

What do you think is going to happen to Ireland's economy now that it is out of the IMF program?

Ireland has started recovering again, albeit after dramatic weakening. As big as the U.S housing bubble was, the Irish one was much bigger, and housing was much more important to the Irish economy than the U.S. economy. The result was a much more severe recession. In the U.S., the unemployment rate jumped from 4.5% to a high of 10.0%; it is now 6.7%. In Ireland, it went from 4.5% to 15.0; it is now 12.4%. Of course, it would be even higher without emigration. Nonetheless, the long climb back has begun.

What can Irish government do to influence this?

The Irish economy is highly dependent on exports, so one of the big negatives for Ireland is the weak Eurozone economy. In turn, the single biggest drag on Eurozone growth is the still-weak European banking system. So I would say anything the Irish government can do to encourage pan-European efforts to recapitalize the European banking system would probably help Ireland as well. I am certainly not saying the Irish taxpayer should inject money into French or Italian banks! Irish taxpayers have done more than their share in bailing out the creditors of the banks in Ireland and should probably keep pushing for relief. But European governments in general need to do what they can to get credit flowing again.

What are some big ideas you would like to see implemented in the next 12 months that would change the world?

That's a big question…world peace, no more terrorism, racial harmony, eradicating poverty…those would be good starts! Unfortunately, there are limits to what is likely to change along those lines the next 12 months.

More specifically for economy-related policies, the answer varies a bit depending on what part of the world you are talking about. Europe needs to accelerate the recapitalization of the banking system. That could mean using public funds, but funding can be structured such that taxpayers will make a profit if the plan succeeds. Japan should open its doors to immigrants to offset the shrinkage in its labor force due the aging of the population. The U.S. also needs some immigration reform. The U.S. also has some budget challenges relating to the aging of the population, although they are more for the next few decades than the next few years. On the budget, after recent debt-limit and government shutdown sagas, perhaps the main hope for our leaders in Washington is simply that they first "do no harm." More generally, countries everywhere can undoubtedly do more to facilitate ongoing globalization. In my view, globalization's positives greatly outweigh the negatives, but inevitably there are losers as well as winners. That increases the need for education and training initiatives to avoid leaving some individuals behind.

Why did you decide to become an economist?

When I went to Trinity College Dublin it was originally to do business studies generally rather than economics specifically, but as an academic subject economics turned out to be a lot more interesting. It is at the center of the business cycle and macro trends, ultimately driving financial markets, which, in turn, feed back into the economy, affecting Main Street as well as Wall Street. For me, economics is not just about the latest market-moving numbers and it is not just theoretically interesting – it is both.

What excites you about your job?

I write a weekly report, a daily report and even intra-day comments on economic data as they are released. I also meet with lots of thought-provoking clients. My job is a combination of making sense of trends as they unfold as well as forecasting what the data are going to show in advance. I generally enjoy all parts of the job, but, in terms of excitement, the best part is probably making a non-consensus forecast and being right. Inevitably, I am wrong a lot as well, but the goal is to be right more often than you are wrong!

* Jim O'Sullivan is Chief U.S. Economist at High Frequency Economics, an independent economics research firm. He forecasts and analyzes macroeconomic developments and policy actions driving financial markets.

According to MarketWatch, he is "the best high-frequency economic forecaster in America." He was MarketWatch Forecaster of the Year for 2004, 2006, 2008, 2011, 2012 and 2013, six of the 10 years since the award was created. Ranking is based on accuracy in projecting U.S. economic indicators, with virtually all Wall Street economists tracked.

Prior to joining High Frequency Economics in June 2012, O'Sullivan was Chief Economist at MF Global. He was Senior U.S. Economist at UBS from 2001 to 2009. O'Sullivan began his career at J.P. Morgan in 1985, where he authored the U.S. section of Global Data Watch, the firm's flagship publication. He was the editor and lead author of Data Decoder: An Investor's Guide to the U.S. Economy, a guidebook for tracking the U.S. economy, published in 2002.

O'Sullivan earned an M.A. in economics from Queen's University in Kingston, Ontario. He holds a B.A. in economics from Trinity College in Dublin, where he was named a Scholar of the University.

Jim lives in New York with his wife Margaret Molloy and his two sons Finn and Emmet.