Expectations and economic fluctuations: an analysis using survey data
AbstractUsing survey-based measures of future U.S. economic activity from the Livingston Survey and the Survey of Professional Forecasters, the authors study how changes in expectations, and their interaction with monetary policy, contribute to fluctuations in macroeconomic aggregates. They find that changes in expected future economic activity are a quantitatively important driver of economic fluctuations: a perception that good times are ahead typically leads to a significant rise in current measures of economic activity and inflation. The authors also find that the short-term interest rate rises in response to expectations of good times as monetary policy tightens. Their results provide quantitative evidence on the importance of expectations-driven business cycles and on the role that monetary policy plays in shaping them.
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Bibliographic InfoPaper provided by Federal Reserve Bank of Philadelphia in its series Working Papers with number 10-6.
Date of creation: 2010
Date of revision:
Other versions of this item:
- Sylvain Leduc & Keith Sill, 2013. "Expectations and Economic Fluctuations: An Analysis Using Survey Data," The Review of Economics and Statistics, MIT Press, MIT Press, vol. 95(4), pages 1352-1367, October.
- Sylvain Leduc & Keith Sill, 2010. "Expectations and economic fluctuations: an analysis using survey data," Working Paper Series, Federal Reserve Bank of San Francisco 2010-09, Federal Reserve Bank of San Francisco.
- E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-04-11 (All new papers)
- NEP-CBA-2010-04-11 (Central Banking)
- NEP-FOR-2010-04-11 (Forecasting)
- NEP-MAC-2010-04-11 (Macroeconomics)
- NEP-MON-2010-04-11 (Monetary Economics)
You can help add them by filling out this form.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:CitEc Project, subscribe to its RSS feed for this item.
- Lambertini, Luisa & Mendicino, Caterina & Punzi, Maria Teresa, 2013. "Expectation-driven cycles in the housing market: Evidence from survey data," Journal of Financial Stability, Elsevier, Elsevier, vol. 9(4), pages 518-529.
- Jaqueson K. Galimberti & Marcelo L. Moura, 2014.
"Improving the Reliability of Real-time Hodrick-Prescott Filtering Using Survey Forecasts,"
KOF Working papers, KOF Swiss Economic Institute, ETH Zurich
14-360, KOF Swiss Economic Institute, ETH Zurich.
- Jaqueson K. Galimberti & Marcelo L. Moura, 2011. "Improving the reliability of real-time Hodrick-Prescott filtering using survey forecasts," Centre for Growth and Business Cycle Research Discussion Paper Series, Economics, The Univeristy of Manchester 159, Economics, The Univeristy of Manchester.
- Todd E. Clark & Troy Davig, 2009.
"Decomposing the declining volatility of long-term inflation expectations,"
Research Working Paper, Federal Reserve Bank of Kansas City
RWP 09-05, Federal Reserve Bank of Kansas City.
- Clark, Todd E. & Davig, Troy, 2011. "Decomposing the declining volatility of long-term inflation expectations," Journal of Economic Dynamics and Control, Elsevier, Elsevier, vol. 35(7), pages 981-999, July.
- Beaudry, Paul & Portier, Franck, 2011.
"A Gains from Trade Perspective on Macroeconomic Fluctuations,"
CEPR Discussion Papers, C.E.P.R. Discussion Papers
8487, C.E.P.R. Discussion Papers.
- Beaudry, Paul & Portier, Franck, 2012. "A gains from trade perspective on macroeconomic fluctuations," ZEW Discussion Papers, ZEW - Zentrum fÃ¼r EuropÃ¤ische Wirtschaftsforschung / Center for European Economic Research 12-002, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Paul Beaudry & Franck Portier, 2011. "A Gains from Trade Perspective on Macroeconomic Fluctuations," NBER Working Papers 17291, National Bureau of Economic Research, Inc.
- Zheng Liu & Sylvain Leduc, 2013.
"Uncertainty Shocks Are Aggregate Demand Shocks,"
2013 Meeting Papers, Society for Economic Dynamics
270, Society for Economic Dynamics.
- Sylvain Leduc & Zheng Liu, 2012. "Uncertainty shocks are aggregate demand shocks," Working Paper Series, Federal Reserve Bank of San Francisco 2012-10, Federal Reserve Bank of San Francisco.
- D'Agostino, Antonello & Mendicino, Caterina, 2014. "Expectation-Driven Cycles: Time-varying Effects," MPRA Paper 53607, University Library of Munich, Germany.
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