The U.S. economy in 1990 and 1991: continued expansion likely
This paper reports an optimistic forecast of U.S. output and inflation trends in 1990_91. Generated by a Bayesian vector autoregression (BVAR) model of the U.S. economy using data available on November 30, 1989, the forecast is more optimistic than a consensus forecast. The key to the model's greater optimism for real growth is its outlook for strong consumer spending. The model's optimism is defended by examining historical precedents as well as comparing the track records of the model and consensus forecasts. The model's measures of forecast uncertainty, however, suggest that its predictions should be taken cautiously. An appendix explains how the model can be used to generate conditional forecasts.
Volume (Year): (1989)
Issue (Month): Fall ()
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References listed on IDEAS
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- Richard M. Todd, 1984. "Improving economic forecasting with Bayesian vector autoregression," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Fall.
- Robert B. Litterman, 1984. "Above-average national growth in 1985 and 1986," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Fall.
- Thomas Doan & Robert B. Litterman & Christopher A. Sims, 1983.
"Forecasting and Conditional Projection Using Realistic Prior Distributions,"
NBER Working Papers
1202, National Bureau of Economic Research, Inc.
- Thomas Doan & Robert B. Litterman & Christopher A. Sims, 1986. "Forecasting and conditional projection using realistic prior distribution," Staff Report 93, Federal Reserve Bank of Minneapolis.
- Miller, Preston J & Roberds, William T, 1991. "The Quantitative Significance of the Lucas Critique," Journal of Business & Economic Statistics, American Statistical Association, vol. 9(4), pages 361-387, October.
- Preston J. Miller & William Roberds, 1987. "The quantitative significance of the Lucas critique," Staff Report 109, Federal Reserve Bank of Minneapolis.
- Michael P. Keane & David E. Runkle, 1989. "Are economic forecasts rational?," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Spr, pages 26-33. Full references (including those not matched with items on IDEAS)
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