Daily Archives: Jul 5, 2017 at 08:25 am EDT

The Economic Trend Usually Looks Positive When Recessions Start

Recognizing when a recession starts in real time is, for all practical purposes, impossible. The one exception to that rule is if you’re willing to endure a high number of false signals in your model. In that case, you’ll see lots of new recessions starting, but only a handful will be the genuine article. But if reliability with a low error rate is required — as it should be – the usual routine won’t suffice. Instead, you’ll need a methodology that focuses on a broad set of key indicators. No less critical is how you define the analysis of the dataset. An optimal set of indicators won’t mean much if you’re running the analysis with a shaky modeling framework.
Continue reading