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This paper investigates breaks in the variability and co-movement of output, consumption, and investment in the G-7 economies. In contrast with most other papers on co-movement, we test for changes in co-movement allowing for breaks in mean and variance. Despite claims that rising integration among these economies has increased output correlations among them, we find no clear evidence of an increase in correlation of growth rates of output, consumption, or investment. This finding is true even for the United States and Canada, which have seen a tremendous increase in bilateral trade shares, and for the members of the euro area in the G-7. [ABSTRACT FROM AUTHOR]

This paper investigates news and noise in Group of Seven (G-7) gross domestic product (GDP) announcements. Revisions to GDP announcements are known to be quite large in all G-7 countries and this study examines the predictability of these data revisions. Previous research work suggests that U.S. GDP revisions are largely unpredictable, as would be the case if the revisions reflect news not available at the time that the preliminary number is produced. The authors find that the degree of predictability varies throughout the G-7 and for the U.S., the revisions are very slightly predictable, but for Italy, Japan and the United Kingdom (UK), about half the variability of subsequent revisions can be accounted for by information available at the time of the preliminary announcement. It appears that revisions reflect, to a significant degree, the removal of noise from the preliminary numbers, rather than the arrival of news. This working paper can be found at the United States Federal Reserve Board's International Finance Discussion Papers. You can access it by going to http://www.federalreserve.gov/pubs/ifdp/.

This paper examines the use and abuse of "real-time" data in economic forecasting. The authors distinguish between three different ways of using real-time data to estimate forecasting equations and argue that the most frequently used approach should generally be avoided. The authors attempt to prove their theory with a model that uses monthly observations of industrial production, employment, and retail sales to predict real gross domestic product (GDP) growth. When the model is estimated using the preferred method, its out-of-sample forecasting performance is clearly superior to that obtained using conventional estimation, and compares favorably with that of the Blue-Chip consensus. This working paper can be found at the United States Federal Reserve Board's International Finance Discussion Papers. You can access it by going to http://www.federalreserve.gov/pubs/ifdp/.

This paper investigates the nature of business cycle asymmetry using a dynamic factor model of output, investment, and consumption. This model investigates two types of asymmetry which improves on the existing literature in two main ways: 1) it is a multivariate model of real gross national product, fixed investment and consumption which allows us to separate out the two types of asymmetry under a precise definition of trend and 2) it enables tests of the marginal statistical significance of each type of asymmetry when the other is allowed to be present. Tests of marginal significance imply both types of asymmetry were present in post-war recessions, although the shifts in trend are less severe than the past literature suggests. This working paper can be found at the United States Federal Reserve Board's International Finance Discussion Papers. You can access it by going to http://www.federalreserve.gov/pubs/ifdp/.

This paper develops an operational early warning system (EWS) that can detect financial crises. An analysis and extension of the early warning system developed by Kaminsky, Lizondo, and Reinhart (1998 and 1999) that is based on the "signal" approach is developed. The system monitors several indicators that are inclined to exhibit an unusual behavior in the periods preceding a crisis. When an indicator exceeds (or falls below) a threshold, then a "signal" is issued that a currency crisis may occur within a given period. The model does a fairly good job of predicting some of the crises in 1997/1998, but several weaknesses to the approach are identified. This study also evaluates how this system can be applied to an individual country. This working paper can be found at the United States Federal Reserve Board's International Finance Discussion Papers. You can access it by going to http://www.federalreserve.gov/pubs/ifdp/.

This paper tests for non-linear dynamics in systems of non-stationary economic time series. The authors use Hall and Heyde's (1980) representation theory to show that the stationary integration relations of an integrated system are usually non-linear stochastic processes. They suggest a sequential non-parametric process to examine stationary co-integration relations for non-linear dynamics and apply this process to short-term US interest rates. They show that the weekly federal funds rate is co-integrated with Treasury bill and commercial paper rates and that co-integration relations are non-linear. This working paper is available at the US Federal Reserve Board. You can access this site by going to www.federalreserve.gov/pubs/workingpapers.htm.

The authors of this paper apply data on historical revisions to real-time estimates of the output gap to examine the implications of measurement error for the design of monetary policy. They use the United States Federal Reserve model of the U.S. economy to measure errors that cause a substantial deterioration in economic performance. The authors also show that it is generally most favorable to place some weight on the level of the output gap in the conduct of policy. They suggest that under extreme conditions it may be better to concentrate on output growth. This working paper is available at the US Federal Reserve Board. You can access this site by going to www.federalreserve.gov/pubs/workingpapers.htm.

This paper examines 102 financial crises in 20 countries and concludes that the Asian crises are not a new variety. The abruptness of the 1997 Asian crises has led many to claim that the crises is of a new breed and not forecastable. The 1997 Asian crises, as well as previous crises in other regions, occur when the economies are in distress, making the degree of fragility of the economy a useful indicator of future crises. Based on this idea, the paper proposes different composite leading indicators of crises. This working paper can be found at the US Federal Reserve Board's International Finance Discussion Papers. You can access this by going to

The purpose of this paper is to show how the credit-constrained markets can rapidly turn financial boom into bust. In 1997 Korea, Indonesia, and Thailand had completed another year of rapid growth; and all three countries hit record growth and trade performance. With large current account imbalances and stock markets past their peak, there were signs of a slowdown, but little warning of a financial disaster. By the end of the year all three countries were in the throes of financial crisis. Share prices were in local currency terms and the collapse was in the value of their currencies despite emergency funding from the International Monetary Fund (IMF). To understand the crisis in Asia, one must focus on the role of financial intermediaries and the price of land and other assets.This working paper can be found at the US Federal Reserve Board's International Finance Discussion Papers. You can access this by going to

The article talks about the benefits of international trade to the U.S. economy. Over the past 20 years, the U.S. economy has become increasingly integrated with the economy of the rest of the world. Lower consumer prices, greater product variety and increased productivity and GDP are the resultant benefits of open trade.

Revisions to GDP announcements in many countries are often large, and Faust, Rogers, and Wright (2003) have found that G-7 GDP revisions are predictable to varying degrees. In this paper, we extend FRW to study revisions to Brazilian GDP announcements. We document that revisions to Brazilian GDP are large relative to those of G-7 countries. Brazilian GDP revisions are also somewhat predictable, which is consistent with the view that GDP revisions correct errors in preliminary GDP rather than reflect news. However, GDP revisions are far from being entirely predictable. Although GDP revisions are largest only one year following the initial GDP release, those revisions are nearly unpredictable. [ABSTRACT FROM AUTHOR]

Can increased uncertainty about the future cause a contraction in output and its components? This paper examines the role of uncertainty shocks in a one-sector, representative-agent, dynamic, stochastic general-equilibrium model. When prices are flexible, uncertainty shocks are not capable of producing business-cycle comovements among key macroeconomic variables. With countercyclical markups through sticky prices, however, uncertainty shocks can generate fluctuations that are consistent with business cycles. Monetary policy usually plays a key role in offsetting the negative impact of uncertainty shocks. If the central bank is constrained by the zero lower bound, then monetary policy can no longer perform its usual stabilizing function and higher uncertainty has even more negative effects on the economy. We calibrate the size of uncertainty shocks using fluctuations in the VIX and find that increased uncertainty about the future may indeed have played a significant role in worsening the Great Recession, which is consistent with statements by policymakers, economists, and the financial press. [ABSTRACT FROM AUTHOR]

This paper points out that several known ways of modeling non-negative nominal interest rates lead to different implications for the risk-neutral distribution of the short rate that can be checked with options data. In particular, Black's boundary models ("interest rates as options") imply a probability density function (pdf) that contains a Dirac delta function and a cumulative distribution function (cdf) that is nonzero at the zero boundary [P(K) ∞ K behavior for put option price for strike K near 0], while models like the CIR and positive-definite quadratic-Gaussian (QG) models have a zero cdf at the boundary [P(K) ∞ Kα, α > 1]. Eurodollar futures options data are found to favor Black's boundary models: the CIR/QG models, even multifactor versions, have difficulty capturing option prices accurately not only in low interest rate environments but also in higher interest rate environments, and data in early 2008 provide an almost tangible signature of the Dirac delta function in Black's boundary pdf models. Options data also contradict the prediction of well-known models whose cdf is zero at the zero boundary, namely that the risk-neutral pdf is always positively skewed. [ABSTRACT FROM AUTHOR]

The article presents an overview of the economic attributes and characteristics of the cross-border area of Finland and Sweden. It offers information on cost differences of the economies of both countries as well as the factors that drive the cross-border investments. Moreover, details of the economic status an performance of both countries are also stated

A large body of empirical work has found that exchange rate movements have only modest effects on inflation. However, the response of an import price index to exchange rate movements may be underestimated because some import price changes are missed when constructing the index. We investigate downward biases that arise when items experiencing a price change are especially likely to exit or to enter the index. We show that, in theoretical pricing models, entry and exit have different implications for the timing and size of these biases. Using Bureau of Labor Statistics (BLS) microdata, we derive empirical bounds on the magnitude of these biases and construct alternative price indexes that are less subject to selection effects. Our analysis suggests that the biases induced by selective exits and entries do not materially alter the literature's view that pass-through to U.S. import prices is low over the short to medium term horizons that are most useful for both forecasting and differentiating amongst economic models. [ABSTRACT FROM AUTHOR]

Many cases of successful economic development, such as South Korea, exhibit long periods of sustained capital accumulation rates. This empirical feature is at odds with the standard neoclassical growth model which predicts initially high and then declining capital accumulation rates. We show that minor modifications of the neoclassical model go a long way towards accounting for the transition dynamics of the South Korean economy. Our modifications recognize that (1) agriculture essentially does not use reproducible capital, and that during the transition period (2) the relative price of capital declines substantially, and (3) the nonfarm employment share increases substantially. [ABSTRACT FROM AUTHOR]

The article reports on the economic forecasting in Mexico. It is said that the U.S. which accounts for over 80% of Mexico's exports will fall into recession in the first half of 2008 but a slow recovery of U.S. domestic demand is expected in 2009. Moreover, Mexico's economy is also expected to grow by just 1.9% in 2008 and 3% in 2009. Furthermore, the paper offers a brief discussion on the forecast of Mexico's economic growth, inflation, exchange rates and external sector.

We analyze the evolution of macroeconomic uncertainty in the United States, based on the forecast errors of consensus survey forecasts of various economic indicators. Comprehensive information contained in the survey forecasts enables us to capture a real-time subjective measure of uncertainty in a simple framework. We jointly model and estimate macroeconomic (common) and indicator-specific uncertainties of four indicators, using a factor stochastic volatility model. Our macroeconomic uncertainty has three major spikes aligned with the 1973{75, 1980, and 2007{09 re-cessions, while other recessions were characterized by increases in indicator-specific uncertainties. We also show that the selection of data vintages affects the estimates and relative size of jumps in estimated uncertainty series. Finally, our macroeconomic uncertainty has a persistent negative impact on real economic activity, rather than producing "wait-and-see" dynamics. [ABSTRACT FROM AUTHOR]

The article presents the results of the yearly bond market liquidity survey in Asia in 2016. Topics discussed include an overview of the market liquidity survey, the quantitative government bond market-related indicators like trading volume and turnover ratio, and the characteristics of the individual government bond markets.

The article looks at the financial indicators in the domestic economy of Finland. In the second quarter of 2006, equity prices slumped but have revived since then. However, the OMX index of equities listed on the Helsinki exchange declined in the second quarter. It also tackles how the recovery in shares on the Helsinki exchange was less convincing than the revivals seen in other European markets.

The article summarizes concepts under The Hamilton Project, an economic strategy to advance opportunity, prosperity and growth in the U.S. It states that the U.S. has failed to make the decision required to advance opportunity, prosperity and growth. It informs that the economic strategy of the Project reflects a judgment that long-term prosperity is best achieved by making economic growth broad-based. It adds that the strategy calls for fiscal discipline and for increased public investment in key growth-enhancing areas.

This publication presents information on Canada as of November 2013. It provides an outlook for 2014-2018 for Canada's politics, election, international relational, economic policy, fiscal policy, monetary policy, economic growth, inflation and exchange rates. Data and charts are also provided including the annual, quarterly and monthly economic data, annual, quarterly and monthly trends and comparative economic indicators.

The article discusses the economic and political outlook for Ukraine as of August 26, 2013. It says that inflation was projected during the second half of 2013 and will improve more in 2014. It adds several factors which influence the country's development including the stable prices of gas imports, monetary policies by the International Monetary Fund (IMF), and human capital from migrants. Tables are presented which provide data on gross domestic product (GDP), debt, and economic indicators.

The article forecasts the economic performance of Russia for 2012-2016 with regards to its international assumptions and economic growth. It mentions that the country's economy will remain dependent on international commodity prices and asserts that it has expanded robustly in 2011 due to strong private consumption growth. It states that inflation slowed down because of falling food prices and affirms that it has experienced a weakening of its currency due to uncertaint global outlook.

The article presents an economic forecast for Serbia for 2012-2016. It mentions the sharp decline in economic activity in Serbia in the second half of 2011 which mirrors the worsening in German and European demand. It forecasts a real gross domestic product (GDP) growth of 0.7% in 2012 and is expected to pick up in 2013-2016 to an average of 3.6%. It also mentions the impact of the crisis in euro zone as well as economic status of the country in terms of inflation and exchange rates.

The article forecasts the economic conditions in Latvia from 2012-2016. The country's real gross domestic product (GDP) has declined in 2009-2010 but has recovered by the second half of 2010 with a strong industrial growth driven by external demand. It predicts a contraction of real GDP in the euro zone in 2012 and expects annual growth to strengthen from 2013 and 2014. It also sees a high risk of a renewed global recession and a break-up of the euro zone.

The article offers information about the economic forecast for Indonesia. It mentions that the private consumption will remain a major force of gross domestic product (GDP) growth, which will expand by 5.3% annually on average in 2012-2016. Moreover, it notes that the rate of inflation will decline to 4.9% in 2012 concerning the slight domestic economic downturn and lower prices of international commodity.

The article presents an economic forecast for Japan for 2010-2015. It discusses the country's international assumptions in terms of its gross domestic product, exchange rates, and financial indicators. It states that the north-east coast of the country will take years to recover from the earthquake and tsunami disaster in March 2011.

The article focuses on the economic forecasting in Brazil. It says that the credit expansion has driven the continuation of the growth of gross domestic product (GDP) which was contributed by the economic slowdown occurred in April to August 2010. It states that the recovery in the domestic demand growth will be contributed by the failure to contain the public spending. It adds that the current-account deficit is anticipated to increase because the exports was outperformed by the import trade.

The article focuses on the economic performance and economic forecast of Colombia from 2008 to 2011. It states that average global prices for oil and coal will increase in 2010 while real gross domestic product (GDP) is expected to grow by 2.5%. It anticipates manufacturing and retail sales' gradual recovery in 2010-11 as well as the decline in export growth in 2011. Moreover, net foreign investment is anticipated to average by approximately 10 billion dollars in 2010-11.

The article presents a forecast regarding the economy of France. It mentions that France has endured the global economic crisis for the household sector was not severely hit by the recession unlike the other European nations. It imparts that gross domestic product (GDP) growth will be volatile quarter after quarter in 2009, and will edge up to 1.3% in 2011. It also discusses several economic indicators influencing GDP of France including inflation, exchange rates, and the external sector.

Shows the annual indicators of economic development of Chile in 2003.

The article presents a political and economic profile of Iraq. It includes information on the country's political and economic outlook for the 2008-2009 period, economic policy outlook and economic forecast. Included as well are data and charts that list annual data and forecast, quarterly data, monthly data, annual trends, and monthly trends.

The article presents an economic forecast for Taiwan in 2008 to 2009. It includes an in-depth analysis of Taiwan's economic growth, inflation, exchange rates and the external sector, as well as information on other economic indicators such as gross domestic product, imports and exports and industrial production.

The article forecasts the performance of the economy of Singapore from 2006 to 2007. Gross domestic product growth on a purchasing power parity basis is expected to slow to 4.7 percent in 2006 and 4.4 percent in 2007. The deceleration is showing that interest rates are rising in many countries resulting in liquidity gradually being drained from the world economy.

Forecasts the economic conditions in the Czech Republic for 2006 to 2007. International assumptions; Economic growth; Inflation.

Analyzes the economic and political conditions in Thailand. Key economic and political changes as of August 2005; Political and economic outlook; Political structure of Thailand.

Forecasts the performance of the economy of South Korea for 2006. International assumptions; Gross domestic product by expenditure; Inflation rate; Exchange rates.

Focuses on political outlook, economic forecast and economic policy outlook of Argentina. International assumptions summary; Debt swap; Political stability of the country.

Focuses on political, economic and economic policy outlook of Argentina for 2005 to 2006. Gross domestic product forecast; Departure from free market orthodox policies.

This chapter discusses the major challenges facing New Zealand's economy against the backdrop of several years of economic success. While the country is now reaping the benefits of earlier reforms and real GDP growth has been very strong, it cannot afford to rest on its laurels if it wishes to catch up to the living standards of the top half of the OECD. The first challenge is to realise more rapid productivity growth, which provides the basis for real income gains. The second challenge is to improve labour utilisation among under-represented groups, not only to lift GDP per person but also to reduce the invidious social effects of benefit dependency. The third challenge is to manage public finances to focus spending on policies and programmes that yield the highest possible social return and contribute most to raising living standards over time. [ABSTRACT FROM AUTHOR]

Presents an economic forecast for the Netherlands from 2003 to 2006. Real gross domestic product growth; Exchange rate; Financial indicators.

Reports on the state of the Netherlands from 2005 to 2006. Politics and government; Economic policy; Economic forecast.

Forecasts the performance of the economy of India. International assumptions summary; Economic growth; Inflation; Exchange rates.

Presents international economic forecast from 2003 to 2006. Gross domestic product; Exchange rates; Financial indicators; Commodity prices.

Provides an economic and political outlook on Brazil for the period 2005-2006. Damage of the government image; Reshuffle of the economic team; Trend for export growth.

Discusses the economic and political condition of Hungary in 2005. Expectation for the left ruling government to remain in power until 2006; Observation of administrative personnel changes in 2004; Strategy of prime minister Ference Gyurcsany to move the government policy towards radicalism; Speculation of the country's failure to meet budget targets; Economic forecast.

Forecasts the political and economic conditions of Belgium for 2005-2006. Threat of a constitutional crisis in the government coalition; Likelihood to emphasize efforts to share values and interests with the U.S.; Acceleration in private consumption; Expectation for oil prices to stabilize by 2005.

Forecasts the economic and political conditions of Austria for the period 2005-2006. Growth in general government budget deficit of gross domestic product; Political situation; International relations with Europe; Increase in inflation and exchange rates.

Forecasts the economic conditions of Austria for the period 2005-2006. Growth in general government budget deficit of gross domestic product; Political situation; International relations with Europe; Increase in inflation and exchange rates.