How Well Do Economists Forecast Recessions
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| Author | : Zidong An |
| Publisher | : International Monetary Fund |
| Total Pages | : 31 |
| Release | : 2019-03-05 |
| Genre | : Business & Economics |
| ISBN | : 1513510657 |
We describe the evolution of forecasts in the run-up to recessions. The GDP forecasts cover 63 countries for the years 1992 to 2014. The main finding is that, while forecasters are generally aware that recession years will be different from other years, they miss the magnitude of the recession by a wide margin until the year is almost over. Forecasts during non-recession years are revised slowly; in recession years, the pace of revision picks up but not sufficiently to avoid large forecast errors. Our second finding is that forecasts of the private sector and the official sector are virtually identical; thus, both are equally good at missing recessions. Strong booms are also missed, providing suggestive evidence for Nordhaus’ (1987) view that behavioral factors—the reluctance to absorb either good or bad news—play a role in the evolution of forecasts.
| Author | : Lakshman Achuthan |
| Publisher | : Crown Currency |
| Total Pages | : 210 |
| Release | : 2004-05-18 |
| Genre | : Business & Economics |
| ISBN | : 0385512589 |
How can you make wise decisions about your company and your personal future when you have no idea where the economy is headed? The answer is, you can’t. But you can learn how to accurately predict turns in the economy so that you can see the road ahead. And BEATING THE BUSINESS CYCLE shows you how. In BEATING THE BUSINESS CYCLE, Lakshman Achuthan and Anirvan Banerji, the directors of the renowned Economic Cycle Research Institute (ECRI) show how anyone can predict and profit from the inevitable booms and busts of the economy. Why should we believe them? Because while so many economists and financial gurus have failed to predict recessions in the past, ECRI’s forecasts are known for being uncannily accurate. The institute successfully predicted the U.S. recession of 2001 many months before the economists did; the 1990 recession and later recovery; and most recently, the weak U.S. recovery in 2002. ECRI is in constant demand by corporate America and the media. It is the “secret weapon” of companies from Disney to DuPont, the major fund managers, and many central banks. BEATING THE BUSINESS CYCLE is the first book to reveal how decision makers at all levels–managers, small business owners, and individuals–can see into the economy’s future when making key decisions. Should a large company search out new clients and build new factories or stores, or should it consider cost cutting and layoffs? Is it the right time for you to splurge on that luxury vacation or addition to your house, or would it be more prudent to cut back on big expenditures and save money for a rainy day? Written in an easy-to-understand, accessible style, BEATING THE BUSINESS CYCLE reveals which of the hundreds of economic indicators to trust and which ones to trash. It will give you the tools and confidence you need to make the right decisions at the right times–even when the rest of the investing and business world would persuade you otherwise. Whether you are a corporate manager or the owner of a small business, whether you have your money invested in stocks or in your home, BEATING THE BUSINESS CYCLE will give you the edge you need to trump the competition and stay ahead of the crowd.
| Author | : Edward E. Leamer |
| Publisher | : |
| Total Pages | : 0 |
| Release | : 2022 |
| Genre | : |
| ISBN | : |
This paper proposes a new way of displaying and analyzing macroeconomic time series to form recession forecasts. The proposed data displays contain the last three years of each expansion. These allow observers to see for themselves what is different about the last year before recession. Based on a statistical model, the most recent data are then probabilistically inserted into these images where the recent data are most similar to the historical data. This amounts to a forecast. The traditional probit model used to forecast recessions inappropriately treats every observation as a separate experiment. This new method deals with these intra-correlation issues. The one variable that is causing a recession alarm is inflation. The unemployment rate is also alarming if the covid-19 data are omitted. The slope of the yield curve, the three-month Treasury yield, and housing starts are all two or three years from the end of the expansion. A probit model that conducts a "horse race" among these five variables reveals it is the bond market variables that best predict recessions. This leaves the Fed under control, but the 1970s data suggests it takes a recession to combat high inflation.
| Author | : John E. Silvia |
| Publisher | : John Wiley & Sons |
| Total Pages | : 354 |
| Release | : 2016-12-14 |
| Genre | : Business & Economics |
| ISBN | : 1119350824 |
Reality-based modeling for today's unique economic recovery Economic Modeling in the Post Great Recession Era presents a more realistic approach to modeling, using direct statistical applications to address the characteristics and trends central to current market behaviors. This book's unique focus on the reality of today's markets makes it an invaluable resource for students and practitioners seeking a comprehensive guide to more accurate forecasting. While most books treat the economy as if it were in a vacuum, building models around idealized or perception-biased behaviors, this book deals with the economy as it currently stands—in a state of recovery, limited by financial constraints, imperfect information, and lags and disparities in price movements. The authors identify how these characteristics impact various markets' behaviors, and quantify those behaviors using SAS as the primary statistical tool. Today's economy bears a number of unique attributes that usual modeling methods fail to consider. This book describes how to approach modeling based on real-world, observable data in order to make better-informed decisions in today's markets. Discover the three economic characteristics with the greatest impact on various markets Create economic models that mirror the current post-recession reality Adopt statistical methods that identify and adapt to structural breaks and lags Factor real-world imperfections into modeling for more accurate forecasting The past few years have shown a clear demarcation between policymakers' forecasts and actual outcomes. As the dust settles on the Great Recession, after-effects linger—and impact our current recovery in ways that diverge from past experience and theoretical expectations. Economic Modeling in the Post Great Recession Era provides comprehensive guidance grounded in reality for today's economic decision-makers.
| Author | : James H. Stock |
| Publisher | : University of Chicago Press |
| Total Pages | : 350 |
| Release | : 2008-04-15 |
| Genre | : Business & Economics |
| ISBN | : 0226774740 |
The inability of forecasters to predict accurately the 1990-1991 recession emphasizes the need for better ways for charting the course of the economy. In this volume, leading economists examine forecasting techniques developed over the past ten years, compare their performance to traditional econometric models, and discuss new methods for forecasting and time series analysis.
| Author | : Henri Bernard |
| Publisher | : |
| Total Pages | : 40 |
| Release | : 1998 |
| Genre | : Economic forecasting |
| ISBN | : |
| Author | : Elia Kacapyr |
| Publisher | : M.E. Sharpe |
| Total Pages | : 224 |
| Release | : 1996 |
| Genre | : Business & Economics |
| ISBN | : 9781563247651 |
Widening the focus from the usual business forecasts, explains the techniques for predicting macroeconomic factors such as economic growth, interest rates, and employment. Reviews the concepts of business cycles and long waves, then describes techniques using economic indicators, time series, econometric models, and consensus. Also considers the evaluation of forecasts. Readers with a solid background in mathematics and statistics should learn now to make forecasts; others should get an intuitive understanding that will improve their interpretation of forecasts by others. Paper edition (unseen), $29.95. Annotation copyright by Book News, Inc., Portland, OR
| Author | : David F. Hendry |
| Publisher | : MIT Press |
| Total Pages | : 236 |
| Release | : 2003 |
| Genre | : Business & Economics |
| ISBN | : 9780262582421 |
How to interpret and evaluate economic forecasts and the uncertainties inherent in them.
| Author | : Nerea M. Pérez |
| Publisher | : Nova Science Publishers |
| Total Pages | : 190 |
| Release | : 2009 |
| Genre | : Business & Economics |
| ISBN | : |
A critical consideration in understanding business cycles is the amplification and propagation of shocks to the economic system. Many recessions seem to arise without a clearly identifiable cause or at least one of significant magnitude to justify an economy-wide recession. How can a small shock cause large changes in the economy? What are the mechanisms that amplify a modest shock such that a serious recession ensues? Despite the persistent search for a mechanism for business cycle amplification and propagation, much research in business cycles seems to ignore the likely role of the financial system. If a shock to the economy inhibits the capital allocation capability of an economy, then a seemingly mild shock may be amplified through its impact on new investment thereby snuffing out economic growth and causing a recession. This book provides new research on the field of recessions from around the globe.
| Author | : John E. Silvia |
| Publisher | : John Wiley & Sons |
| Total Pages | : 400 |
| Release | : 2014-03-10 |
| Genre | : Business & Economics |
| ISBN | : 1118569547 |
Discover the secrets to applying simple econometric techniques to improve forecasting Equipping analysts, practitioners, and graduate students with a statistical framework to make effective decisions based on the application of simple economic and statistical methods, Economic and Business Forecasting offers a comprehensive and practical approach to quantifying and accurate forecasting of key variables. Using simple econometric techniques, author John E. Silvia focuses on a select set of major economic and financial variables, revealing how to optimally use statistical software as a template to apply to your own variables of interest. Presents the economic and financial variables that offer unique insights into economic performance Highlights the econometric techniques that can be used to characterize variables Explores the application of SAS software, complete with simple explanations of SAS-code and output Identifies key econometric issues with practical solutions to those problems Presenting the "ten commandments" for economic and business forecasting, this book provides you with a practical forecasting framework you can use for important everyday business applications.
