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The Armchair Forecaster

The Armchair Forecaster Andrew J. Buck Temple University 215-204-1985 215-204-8173 (FAX) buck@astro.ocis.temple.edu

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The Armchair Forecaster

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  1. The Armchair Forecaster Andrew J. Buck Temple University 215-204-1985 215-204-8173 (FAX) buck@astro.ocis.temple.edu

  2. Important Web LinksMy Home Pagehttp://oll.temple.edu/economicsInteractive Economics Databasehttp://bos.business.uab.edu/browse/bci_97.htmEconomic Indicators: The Conference Boardhttp://www.tcb-indicators.orgBuild Your Own Forecasting Modelhttp://fairmodel.econ.yale.eduCommentary, Regional and National Forecastshttp://www.dismal.comGeneral Economic Interesthttp://www.yardeni.com/welcome.htmlEuropean Economic Statisticshttp://europa.eu.int/en/comm/eurostatThe Economies of Asia and Latin Americahttp://www.stern.nyu.edu/~nroubini/asia/AsianHomepage.html

  3. Forecasting and some basic economic paradigmsForecasting is the art of trying to see into the future on the basis of what we know about the present. In order to avoid the appearance of gazing into a crystal ball, we try to use paradigms of economic behavior to organize our thinking.Supply and Demand -Demand  P, QDemand  P, QSupply  P, QSupply  P, QFiscal PolicyTaxes  AD GDPGov't Spending  AD GDPMonetary Policy Res. Req.  MS i I AD GDP Disc. Rate  MS i I AD GDP Buy Bonds  MS i I AD GDPA Small Simulation

  4. Some Features of the Domestic and World Economic Landscape The U.S. Asia Brazil Europe

  5. United States 1998 Growth: Low of 2%, High of 5% 1999 Outlook Weakness in Asia, Russia and Latin America Stagnant Europe Profit Squeeze Consumer is a weakening engine of growth

  6. Brazil • Too much short term foreign debt • What did they spend all those reales on? • Central Gov’t vs. States • Fiscal discipline

  7. Asia • Overvalued Currencies • Too Much Foreign Debt • Risky Lending in Existing Assets

  8. Europe • Sacrificed Fiscal Autonomy on the Alter of a Unified Currency • Expensive, Inflexible Labor • Bright Spots: Ireland and Portugal

  9. Components of ILEI • Interest Rate Spread • Money Supply • Average Work Week • New Orders, Consumer Goods • S&P 500 • Joblessness • Vendor Performance • Housing Permits • Consumer Expectations • New Orders, Non-defense Capital Goods

  10. LEI - The Long View • 6 - 9 months out • Booms and recessions • Recent Boom

  11. Recent History of LEI • 3 Consecutive Declines = Recession • Oct: 105.7 • Nov: 106.3 • Next Release: 2/2/99

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