Testing the Power of Leading Indicators to Predict Business Cycle Phase Changes

In the business cycle literature researchers often want to determine the extent to which models of the business cycle reproduce broad characteristics of the real world business cycle they purport to represent. Of considerable interest is whether a model’s implied cycle chronology is consistent with the actual business cycle chronology. In the US, a very widely accepted business cycle chronology is that compiled by the National Bureau of Economic research (NBER) and the vast majority of US business cycle scholars have, for many years, proceeded to test their models for their consistency with the NBER dates. In doing this, one of the most prevalent metrics in use since its introduction into the business cycle literature by Diebold and Rudebusch (1989) is the so-called quadratic probability score, or QPS. However, an important limitation to the use of the QPS statistic is that its sampling distribution is unknown so that rigorous statistical inference is not feasible. We suggest circumventing this by bootstrapping the distribution. This analysis yields some interesting insights into the relationship between statistical measures of goodness of fit of a model and the ability of the model to predict some underlying set of regimes of interest. Furthermore, in modeling the business cycle, a popular approach in recent years has been to use some variant of the so-called Markov regime switching (MRS) model first introduced by Hamilton (1989) and we therefore use MRS models as the framework for the paper. Of course, the approach could be applied to any US business cycle model.Markov Regime Switching, Business Cycle, Quadratic Probability Score

DURATION DEPENDENCE IN THE US BUSINESS CYCLE

Durland and McCurdy (1994) investigated the issue of duration dependence in US business cycle phases using a Markov regime switching approach, introduced by Hamilton (1989) and extended to the case of variable transition parameters by Filardo (1994). In Durland and McCurdy’s model duration alone was used as an explanatory of the transition probabilities. They found that recessions were duration dependent whilst expansions were not. In this paper, we explicitly incorporate the widely-accepted US business cycle phase change dates as determined by the NBER, and use a state-dependent multinomial Logit (and Probit) modelling framework. The model incorporates both duration and movements in two leading indexes - one designed to have a short lead (SLI) and the other designed to have a longer lead (LLI) - as potential explanators. We find that doing so suggests that current duration is not only a significant determinant of transition out of recessions, but that there is some evidence that it is also weakly significant in the case of expansions. Furthermore, we find that SLI has more informational content for the termination of recessions whilst LLI does so for expansions.

Equal remuneration under the Fair Work Act 2009

The Commission’s Pay Equity Unit commissioned this research report to: assist parties to equal remuneration proceedings under Part 2-7 to engage in productive discussion and work towards greater consensus in relation to the proceedings; and inform potential parties about the matters they might be required to address and the type of evidence they might be required to bring as part of an equal remuneration proceeding. The report responds to those objectives in the following structure: setting the global scene, by describing the international labour standards on equal remuneration, providing international data on the GPG and summarising key elements of the approaches taken in selected overseas jurisdictions analysing the treatment of equal remuneration under the Fair Work Act; outlining the SACS case and explaining the various decisions given by the Fair Work Commission and its predecessors  reviewing available literature on how the GPG might be explained and assessed; and drawing on the research undertaken for the above purposes, outlining approaches which might usefully guide the conduct of future proceedings under Part 2-7 of the Fair Work Act The report also includes three appendices. The first two detail the development of equal remuneration regulation at the federal level (Appendix A) and under the State industrial systems (Appendix B). The third, Appendix C, provides an overview of the approaches taken in the European Union and ten selected countries—Belgium, Canada, Ireland, Finland, the Netherlands, New Zealand, Norway, Sweden, the United Kingdom and the United States. The report is the product of independent research by the authors, and the views it contains are those of the authors, not of the staff or Members of the Fair Work Commission

Enroute flight planning: The design of cooperative planning systems

Design concepts and principles to guide in the building of cooperative problem solving systems are being developed and evaluated. In particular, the design of cooperative systems for enroute flight planning is being studied. The investigation involves a three stage process, modeling human performance in existing environments, building cognitive artifacts, and studying the performance of people working in collaboration with these artifacts. The most significant design concepts and principles identified thus far are the principle focus

Design concepts for the development of cooperative problem-solving systems

There are many problem-solving tasks that are too complex to fully automate given the current state of technology. Nevertheless, significant improvements in overall system performance could result from the introduction of well-designed computer aids. We have been studying the development of cognitive tools for one such problem-solving task, enroute flight path planning for commercial airlines. Our goal was two-fold. First, we were developing specific systems designs to help with this important practical problem. Second, we are using this context to explore general design concepts to guide in the development of cooperative problem-solving systems. These designs concepts are described

An Improved Method of Documenting Activity Patterns of Post-Emergence Polar Bears (Ursus maritimus) in Northern Alaska

Throughout their circumpolar range, pregnant female polar bears (Ursus maritimus) create snow dens in which they give birth to altricial cubs. Because polar bear neonates are born in such an undeveloped state, their survival requires a long, undisturbed period of in-den development. To mitigate human impacts on denning bears, it is necessary to understand the chronology of denning, the behaviors of denning bears, and their sensitivity to human activities. Since 2002, we have studied the den emergence behaviors of polar bears in northern Alaska; however, we moved from using on-site observers (2002 – 03) to using autonomous video systems (2005 – 08). Here we compare the duration, activity budgets, and behaviors of polar bears to see whether observation methods affected their activities. Camera systems recorded nearly 10 times the data per den recorded by human observers (526 h/den and 57 h/den respectively). We found no difference between the two study periods in emergence dates, duration at den sites, abandonment dates, or activity budgets for polar bears. We observed a 16-fold reduction in the number of bear-human interactions when using cameras instead of human observers. There was, however, a marked increase in the intensity of response when using cameras (125 m) as compared to observers in blinds (400 m). An understanding of these activity patterns can be used to manage human activities near dens so as to minimize disturbance.À l’échelle de leur aire de répartition circumpolaire, les ourses polaires (Ursus maritimus) en gestation se créent une tanière de neige pour donner naissance à leurs oursons à développement tardif. Puisque les nouveau-nés de l’ourse polaire naissent dans un état si peu développé, leur survie nécessite une longue période de développement non perturbé en tanière. Afin d’atténuer les incidences de l’être humain sur les ours en tanière, il est nécessaire de comprendre la chronologie de la mise bas, les comportements des ours en tanière et leur sensibilité à l’activité humaine. À partir de 2002, nous avons étudié les comportements de sortie des tanières des ours polaires du nord de l’Alaska, tout d’abord au moyen d’observations faites sur place (en 2002 et 2003) et ensuite, au moyen de caméras vidéo autonomes (de 2005 à 2008). Ici, nous comparons la durée, la répartition des activités et les comportements des ours polaires afin de déterminer si les méthodes d’observation ont influencé leurs activités. Les caméras ont enregistré près de dix fois plus de données par tanière que les observateurs humains (526 h/tanière et 57 h/tanière respectivement). Nous n’avons trouvé aucune différence entre les deux périodes à l’étude en ce qui a trait aux dates de sortie, aux durées de séjour en tanière, aux dates d’abandon ou à la répartition des activités des ours polaires. Lorsque nous avons utilisé des caméras par opposition à des observateurs, nous avons dénoté 16 fois moins d’interactions entre les ours et l’être humain. Cependant, nous avons remarqué une augmentation accrue sur le plan de l’intensité de la réponse lorsque nous nous sommes servis de caméras (125 m) comparativement aux observateurs dissimulés (400 m). La compréhension de ces modèles d’activités peut servir à gérer l’activité humaine à proximité des tanières afin de minimiser les perturbations

Design of a cooperative problem-solving system for enroute flight planning: An empirical study of its use by airline dispatchers

In a previous report, an empirical study of 30 pilots using the Flight Planning Testbed was reported. An identical experiment using the Flight Planning Testbed (FPT), except that 27 airline dispatchers were studied, is described. Five general questions were addressed in this study: (1) under what circumstances do the introduction of computer-generated suggestions (flight plans) influence the planning behavior of dispatchers (either in a beneficial or adverse manner); (2) what is the nature of such influences (i.e., how are the person's cognitive processes changed); (3) how beneficial are the general design concepts underlying FPT (use of a graphical interface, embedding graphics in a spreadsheet, etc.); (4) how effective are the specific implementation decisions made in realizing these general design concepts; and (5) how effectively do dispatchers evaluate situations requiring replanning, and how effectively do they identify appropriate solutions to these situations

Design of a cooperative problem-solving system for en-route flight planning: An empirical evaluation

Both optimization techniques and expert systems technologies are popular approaches for developing tools to assist in complex problem-solving tasks. Because of the underlying complexity of many such tasks, however, the models of the world implicitly or explicitly embedded in such tools are often incomplete and the problem-solving methods fallible. The result can be 'brittleness' in situations that were not anticipated by the system designers. To deal with this weakness, it has been suggested that 'cooperative' rather than 'automated' problem-solving systems be designed. Such cooperative systems are proposed to explicitly enhance the collaboration of the person (or a group of people) and the computer system. This study evaluates the impact of alternative design concepts on the performance of 30 airline pilots interacting with such a cooperative system designed to support enroute flight planning. The results clearly demonstrate that different system design concepts can strongly influence the cognitive processes and resultant performances of users. Based on think-aloud protocols, cognitive models are proposed to account for how features of the computer system interacted with specific types of scenarios to influence exploration and decision making by the pilots. The results are then used to develop recommendations for guiding the design of cooperative systems

Graphical interfaces for cooperative planning systems

Based on a cognitive task analysis of 5 airline flight crews in a simulator study, researchers have designed a testbed for studying computer aids for en route flight path planning. This testbed runs on a Mac II controlling three color monitors, and is being used to study the design of aids for both dispatchers and flight crews. Specifically, the research focuses on design concepts for developing cooperative problem-solving systems. We use en route flight planning (selecting alternate routes or destinations due to unanticipated weather, traffic, malfunctions, etc.) as the context for studying the design of such systems. Researchers are currently exploring three questions in this test environment: (1) When interacting with a flight planning aid, how does the role of the pilot influence overall system performance; (2) Can the architecture for a cooperative planning system be built around Sacerdoti's (1983) concept of an abstraction hierarchy, where the pilot can interact with the system at many different levels of detail (but where the computer aid by default handles lower level details that the pilot has chosen not to deat with); and (3) Can graphical displays and direct manipulation of these displays provide perceptual enhancements (Larkin and Simon, 1987) of the pilot's problem-solving activities. Information is given in viewgraph form

An empirical evaluation of graphical interfaces to support flight planning

Whether optimization techniques or expert systems technologies are used, the underlying inference processes and the model or knowledge base for a computerized problem-solving system are likely to be incomplete for any given complex, real-world task. To deal with the resultant brittleness, it has been suggested that 'cooperative' rather than 'automated' problem-solving systems be designed. Such cooperative systems are proposed to explicitly enhance the collaboration of people and the computer system when working in partnership to solve problems. This study evaluates the impact of alternative design concepts on the performance of airline pilots interacting with such a cooperative system designed to support enroute flight planning. Thirty pilots were studied using three different versions of the system. The results clearly demonstrate that different system design concepts can strongly influence the cognitive processes of users. Indeed, one of the designs studied caused four times as many pilots to accept a poor flight amendment. Based on think-aloud protocols, cognitive models are proposed to account for how features of the computer system interacted with specific types of scenarios to influence exploration and decision-making by the pilots. The results are then used to develop recommendations for guiding the design of cooperative systems