Search Results
Journal Article
Man vs. model? The role of judgment in forecasting
This article presents evidence on the role that judgmental adjustments play in macroeconomic forecast accuracy. It starts by contrasting the predictive records of four prominent forecasters who adjust their models with those of three models that are used mechanically. The adjusted forecasts tend to be more accurate overall, although important exceptions can be found. Next the article compares adjusted forecasts with those generated mechanically by the same models. Again, with some significant exceptions, judgmental adjustments improve accuracy more often than not. ; The article closes by ...
Journal Article
How fast can we grow?
Nearly thirty years ago, Arthur Okun posed the question, "How much output can the economy produce under conditions of full employment?" He offered a "simple and direct" answer that now, with the benefit of hindsight, seems outmoded and inadequate. This article argues that a minor modification of Okuns procedure based on demographics can adequately account for changes in the potential growth rate over the last 35 years and provide an idea of what to expect in the next ten years. Specifically, it is suggested that changes in the composition and rate of growth of the working-age population ...
Journal Article
\"Whither New England\"?
This article attempts to identify precursors, or indicators, of New England employment. The predictive power of a diverse array of variables is calculated and compared. However, because no single variable is likely to contain all information of predictive value, the article then explores alternative methods of combining several variables into an index or statistical "model" of New England employment growth. The variables are separated into regional, national, and expectational in order to measure the predictive value of each type of information. ; In both in-sample and out-of-sample tests, ...
Journal Article
The discount rate: the other tool of monetary policy
Although open market operations are clearly the primary monetary policy tool, the discount rate is not without influence. Federal Reserve Banks propose any discount rate changes, and the Board of Governors decides whether to accept, reject, or take no action on their requests. This article examines the involvement and influence of the various Reserve Banks in this process, exploring their participation over a 20-year period. The historical analysis shows that Reserve Banks differ in the frequency, persistence, and direction of their proposals for change. ; The article also develops ...
Journal Article
Consensus forecasts: tyranny of the majority?
Journal Article
Estimating GNP: the trade-off between timeliness and accuracy