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Full-Text Articles in Macroeconomics

Comment, Dean D. Croushore Jan 2012

Comment, Dean D. Croushore

Economics Faculty Publications

No abstract provided.


Will Specialization Continue Forever? A Case Study Of Interactions Between Industry Specialization And Diversity, Xiaobing Shuai Aug 2011

Will Specialization Continue Forever? A Case Study Of Interactions Between Industry Specialization And Diversity, Xiaobing Shuai

School of Professional and Continuing Studies Faculty Publications

This paper studies the interactions between industry specialization and diversity. Several studies have shown that competitive industries in a region grew faster, thus expanding their shares in overall employment. The implication is that a region will become more specialized in its competitive industries and the process will continue forever barring external intervention. Utilizing an econometric model on county level employment growth in Virginia, this study confirms that competitive industries experience faster employment growth, reinforcing specialization. However, as specialization proceeds, it reduces economic diversity. That will hurt job creation, as economic diversity also stimulates employment growth. The interactions between specialization and ...


Real-Time Forecasting, Dean D. Croushore Jan 2011

Real-Time Forecasting, Dean D. Croushore

Economics Faculty Publications

This chapter will discuss real-time forecasting in a macroeconomic policy context. I will begin by talking about the Survey of Professional Forecasters (SPF), a survey of private-sector forecasters. Next, I will discuss research on real-time data analysis and its importance in forecasting. Finally, I will discuss real-time forecasting in the 1990s.


Philadelphia Fed Forecasting Surveys: Their Value For Research, Dean D. Croushore Jul 2010

Philadelphia Fed Forecasting Surveys: Their Value For Research, Dean D. Croushore

Economics Faculty Publications

The Federal Reserve Bank of Philadelphia has conducted both the Survey of Professional Forecasters and the Livingston Survey for 20 years. Both surveys of private-sector forecasters provide researchers, central bankers, news media, and the public with detailed forecasts of major macroeconomic variables. The surveys have proved helpful for people who are planning for the future, and they have also provided useful input into the decisions of policymakers at the Federal Reserve and elsewhere. In this article, Dean Croushore provides an overview of the surveys and discusses the ways in which researchers have used the surveys.


Consumer Confidence Surveys: Can They Help Us Forecast Consumer Spending In Real Time?, Dean D. Croushore Jul 2006

Consumer Confidence Surveys: Can They Help Us Forecast Consumer Spending In Real Time?, Dean D. Croushore

Economics Faculty Publications

In 1993, the Philadelphia Fed undertook a project to develop a real-time data set for macroeconomists, who can use these data in many ways — for example, when analyzing indexes of consumer confidence. existing research indicates that consumer-confidence measures, though highly correlated with future spending, do not improve forecasts of future spending. but these studies used revised data that were not available to forecasters at the time they made their forecasts. In this article, Dean Croushore uses the real-time data set to investigate an important question: Does using data available to forecasters at the time — that is, real-time data — make measures ...


How Do Forecasts Respond To Changes In Monetary Policy?, Laurence Ball, Dean D. Croushore Oct 2001

How Do Forecasts Respond To Changes In Monetary Policy?, Laurence Ball, Dean D. Croushore

Economics Faculty Publications

Just as changes in atmospheric conditions affect weather forecasts, changes in monetary policy affect economic forecasts. When monetary policy shifts, forecasters change their predictions about growth and inflation. But does the economy change to the same extent that forecasts do? In this article, Laurence Ball and Dean Croushore examine forecasts from the Survey of Professional Forecasters to determine if forecasts and the economy respond in tandem or if there are significant differences.


A Funny Thing Happened On The Way To The Data Bank: A Real-Time Data Set For Macroeconomists, Dean D. Croushore, Tom Stark Sep 2000

A Funny Thing Happened On The Way To The Data Bank: A Real-Time Data Set For Macroeconomists, Dean D. Croushore, Tom Stark

Economics Faculty Publications

Economic policies are set and forecasts are made based on data that policymakers and forecasters have available to them. But such data are often revised — at times significantly. As a result, when policies and forecasts are viewed from the perspective of today's data, they may not seem sensible. Recognizing this problem, the Research Department at the Philadelphia Fed created a real-time data set so that economists today have the same data that were available to policymakers and forecasters in the past. In this article, Dean Croushore and Tom Stark tell how the data set was constructed, show how large ...


How Useful Are Forecasts Of Corporate Profits, Dean D. Croushore Sep 1999

How Useful Are Forecasts Of Corporate Profits, Dean D. Croushore

Economics Faculty Publications

If forecasters predict higher earnings for corporations, the stock market will rise. Stock prices will drop with a forecast of lower earnings. But are such forecasts on the money? Dean Croushore uses data from the Survey of Professional Forecasters to check the accuracy of forecasts of corporate profits. The results show that, despite the volatility of corporate profits, the forecasts are rational.


Low Inflation: The Surprise Of The 1990s, Dean D. Croushore Jul 1998

Low Inflation: The Surprise Of The 1990s, Dean D. Croushore

Economics Faculty Publications

For most of the 1990s, forecasters have been predicting an upturn in inflation. Yet, over that same period, the United States has experienced stable or declining inflation. Why have forecasts been at odds with reality? And why does it matter? In this article, Dean Croushore considers some answers to these questions and explains why inflation is the economic surprise of the decade.


Economic Crisis And Reform In Bulgaria, 1989-92, Jonathan B. Wight, M. Louise Fox Jan 1998

Economic Crisis And Reform In Bulgaria, 1989-92, Jonathan B. Wight, M. Louise Fox

Economics Faculty Publications

Bulgaria's economy began a deep and prolonged collapse in 1989, exactly one hundred years after the noted Bulgarian novelist Ivan Vazov published his stirring novel opposing the tyranny of the Ottomans and warning of the mistaken road of socialism. The 1989 collapse was partially a reflection of the external political upheavals among Bulgaria's trading partners in Eastern Europe, which were rejecting socialist principles. But it was also a reflection of the weaknesses imbedded in the economy after 30 years of central planning. Political instability within Bulgaria, market reforms, and attempts at privatization contributed further to economic uncertainty resulting ...


Inflation Forecasts: How Good Are They?, Dean D. Croushore May 1996

Inflation Forecasts: How Good Are They?, Dean D. Croushore

Economics Faculty Publications

Forecasts of inflation affect decision-making in many segments of the economy. But in the early 1980s, economists found that forecasts in surveys taken over the past 20 years systematically underpredicted inflation. As a result, many economists stopped paying attention to forecasts. However, they may have abandoned them too quickly. In this article, Dean Croushore takes a closer look at survey forecasts and, after considering some relevant factors, concludes that inflation forecasts may not be as bad as you think.


Evaluating Mccallum's Rule For Monetary Policy, Dean D. Croushore, Tom Stark Jan 1995

Evaluating Mccallum's Rule For Monetary Policy, Dean D. Croushore, Tom Stark

Economics Faculty Publications

Some economists have proposed that the Federal Reserve follow a rigid rule for conducting monetary policy. A policy rule is a formula that tells the Fed how to set monetary policy. For example, in 1959 Milton Friedman argued that the Fed should increase the money supply a constant 4 percent each year to eliminate inflation and avoid destabilizing the economy. More recently, other economists have identified an additional benefit: a rule can eliminate the inflationary bias that could occur when discretionary monetary policy is used. Under a discretionary policy, decisions are made on a case-by-case basis.

But economists don't ...


Introducing: The Survey Of Professional Forecasters, Dean D. Croushore Nov 1993

Introducing: The Survey Of Professional Forecasters, Dean D. Croushore

Economics Faculty Publications

Forecasts play a crucial role in the economy. Businesses won't hire workers as readily if they think the economy may go into a recession soon. Long-term interest rates will rise if people in the financial markets expect inflation to increase. And firms are less likely to borrow money for new investment spending today if they think interest rates will soon decline.

Forecasts are important for many decisions, but not many people have the knowledge and experience to forecast economic variables well. It makes sense, therefore, for people to rely on the forecasts of experts. One easy way to get ...


What Are The Costs Of Disinflation?, Dean D. Croushore May 1992

What Are The Costs Of Disinflation?, Dean D. Croushore

Economics Faculty Publications

The Federal Reserve can use monetary policy to reduce the inflation rate, a process known as disinflation. Are the benefits of disinflation worth the costs? Proponents of disinflation argue that the long-run benefits of price stability, including lower interest rates, increased economic efficiency, and perhaps faster economic growth, greatly exceed the short-run costs. Opponents, of course, claim the opposite, usually arguing that the short-run costs in terms of higher unemployment and lost output would be immense.


How Big Is Your Share Of Government Debt?, Dean D. Croushore Nov 1990

How Big Is Your Share Of Government Debt?, Dean D. Croushore

Economics Faculty Publications

In evaluating the government's financial position, taxpayers need to account not only for its debt, but also for its ownership of tangible assets. Each taxpayer has a share of the government's net worth that is positive; however, the share was larger 10 years ago. While the real net debt tripled, this huge rise in government indebtedness generated no similar gain in government assets. Taxpayers will be paying interest on this debt with little hope of higher future returns from government assets to help pay it off. It is recommended that the government adopt a capital-budgeting system. This system ...