Forecasting the Resurgence of the U.S. Economy in 2010: An Expert Judgment Approach

Andrew R. Blair (), Gershon Mandelker (), Thomas L. Saaty () and Rozann Whitaker ()
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Andrew R. Blair: Katz Graduate School of Business, University of Pittsburgh Pittsburgh PA 15260, U.S.A
Gershon Mandelker: Katz Graduate School of Business, University of Pittsburgh Pittsburgh PA 15260, U.S.A
Thomas L. Saaty: Katz Graduate School of Business, University of Pittsburgh Pittsburgh PA 15260, U.S.A
Rozann Whitaker: Creative Decisions Foundation 4922 Ellsworth Avenue, Pittsburgh PA 15213, U.S.A.

Review of Economics & Finance, 2015, vol. 5, 1-18

Abstract: This paper describes a forecast of the date of the recovery of the US economy from the contraction that began in December 2007. The forecast used an expert judgment approach (featuring 29 pairwise comparisons of the key elements in our forecasting model) within the framework of decision theory, the Analytic Hierarchy Process, as well as its generalization to dependence and feedback, the Analytic Network Process. This paper has once again demonstrated how the Analytic Hierarchy Process can serve as an additional tool for providing macroeconomic forecasts. We have based our forecast of the time period of the trough of the current economic cycle within the context of the macroeconomic conditions confronting the U.S. economy during late 2008, which had begun to experience a recession from its peak in December 2007, after an expansion of 73 months. We have concluded that the recovery would begin during the third quarter of 2010, from a trough that would be reached some 20 months forward from the date of the December 2008 forecasting exercise (and some 32 months from the previous cyclical peak, which is considerably longer than all other post-World War II contractions).

Keywords: Macroeconomic forecasting; Analytic Hierarchy Process; Expert judgment approaches to economic forecasting; Forecasting U.S. economic expansions (search for similar items in EconPapers)
JEL-codes: C53 E32 E37 (search for similar items in EconPapers)
Date: 2015
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