Chapter 28: Economic Measurement and Forecasting

Mehdi Mostaghimi

Economic measurement and forecasting In December 2000, within a few days after a U.S. Supreme Court decision on the result of the November presidential election, then–Federal Reserve Chairman Alan Greenspan announced a grim prediction of a downturn for the near future of the U.S. economy. To counter it, the Federal Reserve implemented a series of expansionary monetary policy actions—cutting the federal funds rate and increasing the supply of money for the ensuing 2 years. In July 2003, the National Bureau of Economic Research (NBER), a nongovernmental think tank organization consisting mostly of academicians, identified and dated a recession in 2001 for the United States with a starting date of March and an ending date of November, for a total of 7 months. An interested person learning about macroeconomic policy decision making, after reading the preceding paragraph, curiously asks a series of questions focused on identifying economic activities, measuring economic activities, ...

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