Facts and Challenges from the Great Recession for Forecasting and Macroeconomic Modeling
Jonathan H. Wright
Journal of Economic Literature
no. 4, December 2013
This paper provides a survey of business cycle facts, updated to take account of recent
data. Emphasis is given to the Great Recession, which was unlike most other postwar
recessions in the United States in being driven by deleveraging and financial market
factors. We document how recessions with financial market origins are different from
those driven by supply or monetary policy shocks. This helps explain why economic
models and predictors that work well at some times do poorly at other times. We
discuss challenges for forecasters and empirical researchers in light of the updated
business cycle facts.
Ng, Serena, and Jonathan H. Wright.
"Facts and Challenges from the Great Recession for Forecasting and Macroeconomic Modeling."
Journal of Economic Literature,
Forecasting Models; Simulation Methods
Business Fluctuations; Cycles
Prices, Business Fluctuations, and Cycles: Forecasting and Simulation: Models and Applications
Interest Rates: Determination, Term Structure, and Effects
Financial Markets and the Macroeconomy