Inside the crystal ball: how to make and use forecasts

Acknowledgments xiii     Introduction: What You Need to Know about Forecasting xv     Chapter 1 What Makes a Successful Forecaster? 1     Grading Forecasters: How Many Pass? 2     Why It\'s So Difficult to Be Prescient 8     Bad Forecasters: One-Hit Wonders, Perennial Outliers, and Copycats 16     Success Factors: Why Some Forecasters Excel 22     Does Experience Make Much of a Difference in Forecasting? 23     Chapter 2 The Art and Science of Making and Using Forecasts 27     Judgment Counts More Than Math 28     Habits of Successful Forecasters: How to Cultivate Them 34     Judging and Scoring Forecasts by Statistics 43     Chapter 3 What Can We Learn from History? 51     It   s Never Normal 52     Some Key Characteristics of Business Cycles 55     National versus State Business Cycles: Does a Rising Tide Lift All Boats? 62     U.S. Monetary Policy and the Great Depression 65     The Great Inflation Is Hard to Forget 68     The Great Moderation: Why It   s Still Relevant 73     Why Was There Reduced Growth Volatility during the Great Moderation? 75     Chapter 4 When Forecasters Get It Wrong 79     The Granddaddy of Forecasting Debacles: The Great Depression 80     The Great Recession: Grandchild of the Granddaddy 81     The Great Recession: Lessons Learned 85     The Productivity Miracle and the \"New Economy\" 86     Productivity: Lessons Learned 88     Y2K: The Disaster That Wasn\'t 90     The Tech Crash Was Not Okay 92     Forecasters at Cyclical Turning Points: How to Evaluate Them 96     Forecasting Recessions 99     Forecasting Recessions: Lessons Learned 101     Chapter 5 Can We Believe What Washington, D.C. Tells Us? 105     Does the U.S. Government \"Cook the Books\" on Economic Data Reports? 106     To What Extent Are Government Forecasts Politically Motivated? 109     Can You Trust the Government\'s Analyses of Its Policies\' Benefits? 114     The Beltway   s Multiplier Mania 120     Multiplier Effects: How Real Are They? 124     Why Government Statistics Keep    Changing Their Mind    127     Living with Revisions 133     Chapter 6 Four Gurus of Economics: Whom to Follow? 137     Four Competing Schools of Economic Thought 139     Minskyites: Should We Keep Listening to Them? 140     Monetarists: Do They Deserve More Respect? 149     Supply-Siders: Still a Role to Play? 156     Keynesians: Are They Just Too Old-Fashioned? 161     Chapter 7 The \"New Normal\": Time to Curb Your Enthusiasm? 171     Must Forecasters Restrain Multiyear U.S. Growth Assumptions? 173     Supply-Side Forecasting: Labor, Capital, and Productivity 175     Are Demographics Destiny? 179     Pivotal Productivity Projections 184     Chapter 8 Animal Spirits: The Intangibles Behind Business Spending 199     Animal Spirits on Main Street and Wall Street 201     Can We Base Forecasts on Confidence Indexes? 207     Business Confidence and Inventory Building 208     How Do Animal Spirits Relate to Job Creation? 213     Confidence and Capital Spending: Do They Move in Tandem? 217     Animal Spirits and Capital Spending 226     Chapter 9 Forecasting Fickle Consumers 229     Making and Spending Money 230     How Do Americans Make Their Money? 231     Will We Ever Start to Save More Money? 237     Why Don\'t Americans Save More? 239     More Wealth = Less Saving 240     Do More Confident Consumers Save Less and Spend More? 248     Does Income Distribution Make a Difference for Saving and Consumer Spending? 250     Pent-Up Demand and Household Formation 252     Chapter 10 What Will It Cost to Live in the Future? 259     Whose Prices Are You Forecasting? 260     Humans Cannot Live on Just Core Goods and Services 261     Sound Judgment Trumps Complexity in Forecasting Inflation 266     Should We Forecast Inflation by Money Supply or Phillips Curve? 271     Hitting Professor Phillips\' Curve 271     A Statistical Lesson from Reviewing Phillips Curve Research 280     Chapter 11 Interest Rates: Forecasters\' Toughest Challenge 285     Figuring the Fed 288     Federal Open Market Committee 288     What Is the Fed\'s \"Reaction Function\"? 290     Is the Fed \"Behind the Curve\"? 293     Can the Fed \"Talk Down\" Interest Rates? 294     Bond Yields: How Reliable Are \"Rules of Thumb\"? 294     Professor Bernanke\'s Expectations-Oriented Explanation of Long-Term Interest Rate  Determinants 297     Supply and Demand Models of Interest Rate Determination 299     When Will OPEC, Japan, and China Stop Buying Our Bonds? 302     What Will Be the Legacy of QE for Interest Rates? 304     What Is the Effect of Fed MBS Purchases on Mortgage Rates? 309     Will Projected Future Budget Deficits Raise Interest Rates? 309     Chapter 12 Forecasting in Troubled Times 315     Natural Disasters: The Economic Cons and Pros 316     How to Respond to a Terrorist Attack 321     Why Oil Price Shocks Don\'t Shock So Much 325     Market Crashes: Why Investors Don\'t Jump from Buildings Anymore 332     Contagion Effects: When China Catches Cold, Will the United States Sneeze? 334     Chapter 13 How to Survive and Thrive in Forecasting 341     Surviving: What to Do When Wrong 345     Hold or Fold? 348     Thriving: Ten Keys to a Successful Career 349     About the Author 355     Index 357