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Decision-making in hard times: What is a recession, why do we care and how do we know when we are in one?

By Kevin Lee and Kalvinder K. Shields

Abstract

Defining a recessionary event as one which impacts adversely on individuals’ economic well being, the paper argues that recession is a multi-faceted phenomenon whose meaning differs from person to person as it impacts on their decision-making in real time. It argues that recession is best represented through the calculation of the nowcast of recession event probabilities. A variety of such probabilities are produced using a real-time data set for the US for the period, focusing on the likelihood of various recessionary events through 1986q1 2008q4 and on prospects beyond the end of the sample

Topics: Recession, Probability Forecasts, Real Time.
Publisher: Dept. of Economics, University of Leicester
Year: 2009
OAI identifier: oai:lra.le.ac.uk:2381/7622

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Citations

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