Working Paper: NBER ID: w15657
Authors: S. Boragan Aruoba; Francis X. Diebold
Abstract: We sketch a framework for monitoring macroeconomic activity in real-time and push it in new directions. In particular, we focus not only on real activity, which has received most attention to date, but also on inflation and its interaction with real activity. As for the recent recession, we find that (1) it likely ended around July 2009; (2) its most extreme aspects concern a real activity decline that was unusually long but less unusually deep, and an inflation decline that was unusually deep but brief; and (3) its real activity and inflation interactions were strongly positive, consistent with an adverse demand shock.
Keywords: No keywords provided
JEL Codes: E3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| real activity (E23) | inflation (E31) |
| inflation (E31) | real activity (E23) |
| real activity decline (F44) | inflation decline (E31) |
| depth of real activity decline (E32) | duration of real activity decline (C41) |
| inflation decline (E31) | duration of inflation decline (E31) |