Analyzing Macroeconomic Forecastability
نویسنده
چکیده
This paper examines whether recessions and booms are forecastable under the assumption that equity prices, housing prices, import prices, exports, and random shocks are not. Each of the 214 eight-quarter periods within the overall 1954:12009:1 period is examined regarding predictions of output growth and in ation. The results for low output growth vary by recession there is no common pattern. Of the eight recessions, three are forecast well. For four of the ve that are not, the main reason for each is not knowing: 1) the random shocks, 2) import prices and equity prices, 3) exports, and 4) exports and equity prices. For the fththe last oneall ve components are large contributors, including housing prices: a perfect storm.
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