An evaluation of real GDP forecasts: 1996-2001

During the second half of the 1990s, forecasters made large and persistent underpredictions of GDP growth; subsequently, they missed the drop off into the recession of 2001. Forecasters do not appear to have behaved unusually during this period: Their out-period forecasts were not far from their perceptions of longer-run trends. This suggests that the forecast errors in 1996-2001 likely reflected some unusual behavior in the economy.Gross domestic product

How professional forecasters view shocks to GDP

Economic activity depends on agents' real-time beliefs regarding the persistence in the shocks they currently perceive to be hitting the economy. This paper uses an unobserved components model of forecast revisions to examine how the professional forecasters comprising the Blue Chip Economic Consensus have viewed such shocks to GDP over the past twenty years. The model estimates that these forecasters attribute more of the variance in the shock to GDP to permanent factors than to transitory developments. Both shocks are significantly correlated with incoming high-frequency indicators of economic activity; but for the permanent component, the correlation is driven by recessions or other periods when activity was weak. The forecasters' shocks also differ noticeably from those generated by some simple econometric models. Taken together, the results suggest that agents? expectations likely are based on broader information sets than those used to specify most empirical models and that the mechanisms generating expectations may differ with the perceived state of the business cycle.Gross domestic product

Evidence on entrepreneurs in the United States: data from the 1989–2004 survey of consumer finances

Using data from the Federal Reserve Board’s Survey of Consumer Finances, the authors examine characteristics of entrepreneurs and the businesses they run. Their analysis confirms that business owners are important sources of saving and wealth creation in the U.S. and that they are less risk averse than other wealthy households. This discounts the notion that the wealth of entrepreneurs disproportionately reflects a buildup of precautionary balances to guard against financial risk.Consumer surveys ; Business enterprises

Using formative research to develop CHANGE! : a curriculum-based physical activity promoting intervention

Background : Low childhood physical activity levels are currently one of the most pressing public health concerns. Numerous school-based physical activity interventions have been conducted with varied success. Identifying effective child-based physical activity interventions are warranted. The purpose of this formative study was to elicit subjective views of children, their parents, and teachers about physical activity to inform the design of the CHANGE! (Children\u27s Health, Activity, and Nutrition: Get Educated!) intervention programme. Methods : Semi-structured mixed-gender interviews (group and individual) were conducted in 11 primary schools, stratified by socioeconomic status, with 60 children aged 9-10 years (24 boys, 36 girls), 33 parents (4 male, 29 female) and 10 teachers (4 male, 6 female). Questions for interviews were structured around the PRECEDE stage of the PRECEDE-PROCEDE model and addressed knowledge, attitudes and beliefs towards physical activity, as well as views on barriers to participation. All data were transcribed verbatim. Pen profiles were constructed from the transcripts in a deductive manner using the Youth Physical Activity Promotion Model framework. The profiles represented analysis outcomes via a diagram of key emergent themes. Results : Analyses revealed an understanding of the relationship between physical activity and health, although some children had limited understanding of what constitutes physical activity. Views elicited by children and parents were generally consistent. Fun, enjoyment and social support were important predictors of physical activity participation, though several barriers such as lack of parental support were identified across all group interviews. The perception of family invested time was positively linked to physical activity engagement. Conclusions : Families have a powerful and important role in promoting health-enhancing behaviours. Involvement of parents and the whole family is a strategy that could be significant to increase children\u27s physical activity levels. Addressing various perceived barriers to such behaviours therefore, remains imperative. <br /

The Distinction between Inventory Holding and Stockout Costs: Implications for Target Inventories, Asymmetric Adjustment, and the Effect of Aggregation on Production Smoothing.

This paper shows that differences between the costs of holding inventories and the costs of incurring stockouts provide a convenient theoretical distinction between production-to-stock and production-to-order industries. Furthermore, differences in holding and stockout costs can cause a firm to replenish inventories following a positive demand surprise at a different speed than it reduces stocks following unexpectedly low sales. This asymmetric adjustment lessens the tendency for firm-specific production shocks to cancel out in aggregation and can cause industry output to be more variable than industry sales even when representative firms exhibit production smoothing behavior. Copyright 1994 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Professional Forecasters' View of Permanent and Transitory Shocks to GDP

This paper examines how the professional forecasters comprising the Blue Chip Economic Consensus view shocks to GDP. I use an unobserved components model of the forecast revisions to identify forecasters' perceptions of permanent and transitory shocks to GDP. The model indicates forecasters: attribute about two-thirds of the variance in current-period revisions to permanent shocks; view the relative importance of permanent shocks similar to the estimates of some simple univariate econometric models; see high-frequency indicators of economic activity as being informative about both permanent and transitory shocks; and react to incoming data differently during periods of economic weakness. (JEL C51, C53, E23, E27, E32, E37)