Details

Economic Modeling in the Post Great Recession Era


Economic Modeling in the Post Great Recession Era

Incomplete Data, Imperfect Markets
Wiley and SAS Business Series 1. Aufl.

von: John E. Silvia, Azhar Iqbal, Sarah Watt House

57,99 €

Verlag: Wiley
Format: PDF
Veröffentl.: 14.12.2016
ISBN/EAN: 9781119350866
Sprache: englisch
Anzahl Seiten: 400

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Beschreibungen

<b>Reality-based modeling for today's unique economic recovery</b> <p><i>Economic Modeling in the Post Great Recession Era</i> presents a more realistic approach to modeling, using direct statistical applications to address the characteristics and trends central to current market behaviors. This book's unique focus on the <i>reality</i> of today's markets makes it an invaluable resource for students and practitioners seeking a comprehensive guide to more accurate forecasting. While most books treat the economy as if it were in a vacuum, building models around idealized or perception-biased behaviors, this book deals with the economy as it currently stands—in a state of recovery, limited by financial constraints, imperfect information, and lags and disparities in price movements. The authors identify how these characteristics impact various markets' behaviors, and quantify those behaviors using SAS as the primary statistical tool.</p> <p>Today's economy bears a number of unique attributes that usual modeling methods fail to consider. This book describes how to approach modeling based on real-world, observable data in order to make better-informed decisions in today's markets.</p> <ul> <li>Discover the three economic characteristics with the greatest impact on various markets</li> <li>Create economic models that mirror the current post-recession reality</li> <li>Adopt statistical methods that identify and adapt to structural breaks and lags</li> <li>Factor real-world imperfections into modeling for more accurate forecasting</li> </ul> <p>The past few years have shown a clear demarcation between policymakers' forecasts and actual outcomes. As the dust settles on the Great Recession, after-effects linger—and impact our current recovery in ways that diverge from past experience and theoretical expectations. <i>Economic Modeling in the Post Great Recession Era</i> provides comprehensive guidance grounded in reality for today's economic decision-makers.</p>
<p>Preface/Justification xiii</p> <p>Acknowledgments xxi</p> <p><b>Chapter 1 Setting the Context 1</b></p> <p>The Problem with Uncritical Assumptions in a Less-Than-Perfect Economy 2</p> <p>The Problem with Models in an Imperfect Economy 3</p> <p>Four Characteristics of a Less-Than-Perfect Economy 4</p> <p>Economic Policy Inconsistencies—The Parable of Strange Bedfellows 13</p> <p><b>Chapter 2 Dynamic Adjustment in an Economy: Frictions Matter 15</b></p> <p>Introduction 16</p> <p>Quantifying Frictions: Is the Long-Run Average a Useful Guide for the Future? 32</p> <p>Modeling Dynamic Adjustment due to Economic Frictions: Decision Making in an Evolving World 49</p> <p>Dynamic Economic Adjustment: An Evolution unto Itself 67</p> <p>Appendix 68</p> <p>A Case for the Multiple Markets: 1983–2008 68</p> <p>The Labor Market: 1983–2008 70</p> <p><b>Chapter 3 Information: Past Imperfect, Present Incomplete, Future Uncertain 73</b></p> <p>Story Behind the Numbers 76</p> <p>Conclusion 103</p> <p><b>Chapter 4 Price Adjustment and Search for Equilibrium 105</b></p> <p>What Barriers Are There to Perfectly Flexible Prices? 107</p> <p>Implications 112</p> <p>Finding Dynamic Adjustment in the Data 116</p> <p>Conclusion 121</p> <p><b>Chapter 5 Business Investment: This Time Is Different 123</b></p> <p>Drivers of Business Spending 125</p> <p>Putting It All Together: Explaining Slow Recovery in Capital Investment 134</p> <p><b>Chapter 6 Corporate Profits: Reward, Incentive, and That Standard of Living 135</b></p> <p>Introduction: Profits as Essential Partner 136</p> <p>The Role of Profits in the Economic Cycle: Five Drivers 137</p> <p>The Role of Profits: Incentives and Rewards 140</p> <p>Concluding Remarks: Modeling Profits 167</p> <p><b>Chapter 7 Labor Market Evolution: Implications for Private-Sector and Public-Policy Decision Makers 169</b></p> <p>Part I: Labor Market Imperfections 171</p> <p>Part II: Heterogeneity in the Labor Market 182</p> <p>Part III: How Do Secular Labor Market Trends Impact Economic Policy? 196</p> <p><b>Chapter 8 Inflation: When What You Get Isn’t What You Expect 205</b></p> <p>Introduction 206</p> <p>What Is Inflation? 207</p> <p>Why Does Inflation Matter? 208</p> <p>What Determines Inflation? 212</p> <p>Inflation after the Great Recession 219</p> <p>Application: Predicting if Central Banks Can Achieve Price Stability 230</p> <p><b>Chapter 9 Interest Rates and Credit: Capital Markets in the Post–Great Recession World 235</b></p> <p>Imperfect Guidance in an Uncertain World 236</p> <p>A Look at Actual History over the Long Run 247</p> <p>Credit and Administered Rates 250</p> <p>Imperfect Information and Credit 255</p> <p>Conclusion: Shift from Historical Benchmarks 280</p> <p><b>Chapter 10 Three-Dimensional Checkers: Open Economy, Capital Flows, and Exchange Rates 281</b></p> <p>Newton’s Third Law 282</p> <p>Introducing a New Price to the Analysis: The Role of Exchange Rates 289</p> <p>Three-Dimensional Checkers on an International Playing Field 295</p> <p>A Perfect Model in an Imperfect World 298</p> <p>Concluding Remarks: Future Looks Different 330</p> <p><b>Chapter 11 Assessing Economic Policy in an Imperfect Economy 331</b></p> <p>Generalized Policy Model 333</p> <p>Rules and Reputation: Beyond Economic Benchmarks 338</p> <p>Confronting Our Three Market Imperfections 340</p> <p>Economic Policy in the Context of an Imperfect Economy 359</p> <p>About the Authors 361</p> <p>Index 363</p>
<p><b>JOHN E. SILVIA</b> is a managing director and the chief economist for Wells Fargo. Previously he worked on Capitol Hill as senior economist for the U.S. Senate Joint Economic Committee and chief economist for the U.S. Senate Banking, Housing, and Urban Affairs Committee. <p><b>AZHAR IQBAL</b> is director and econometrician at Wells Fargo Securities. <p><b>SARAH WATT HOUSE</b> is vice president of Wells Fargo Securities.
<p><b>PRAISE FOR ECONOMIC MODELING <i>in the</i> POST GREAT RECESSION ERA</b> <p>"The years since the end of the Great Recession have been an era of disappointing economic performance in which the long-awaited (and long-expected) return to pre-recession trends has been slow to materialize. The authors of this fine new book develop the theme that the Great Recession marks a structural break that has had long-lasting effects on the trend paths of the economy and then explain and demonstrate how to construct useful econometric models that account for this new reality. Highly recommended!"<br> <b>—Rob Roy McGregor,</b> Professor of Economics, Belk College of Business, UNC Charlotte <p>"John, Azhar, and Sarah's book combines a practical examination of an imperfect economy with a focus on current issues of jobs, inflation, and credit markets. The book recognizes structural change in the 21st century economy and does not engage in wishful thinking hoping for a return to a simpler, idealized economic landscape. This is the type of thinking we need in the post–Great Recession era."<br> <b>—Larry Kudlow,</b> <i>The Larry Kudlow Show,</i> Kudlow & Co., LLC <p>"It has been well-documented that nobody has been more right about the economy since the Great Recession began than John Silvia. Anyone who wants to understand what has been going on, model it, or think about how to improve it, needs to read this book."<br> <b>—Kevin Hassett,</b> Director of Economic Policy Studies, AEI

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