Expectations and Economic Fluctuations: An Analysis Using Survey Data

Sylvain Leduc and Keith Sill ()

The Review of Economics and Statistics, 2013, vol. 95, issue 4, 1352-1367

Abstract: Using survey-based measures of future U.S. economic activity from the Livingston Survey and the Survey of Professional Forecasters, we study how changes in expectations and their interaction with monetary policy contribute to fluctuations in macroeconomic aggregates. We find that changes in expected future economic activity are a quantitatively important driver of economic fluctuations: a perception that good times are ahead typically leads to a significant rise in current measures of economic activity and inflation. We also find that the short-term interest rate rises in response to expectations of good times as monetary policy tightens. © 2013 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Keywords: expectations; survey data; economic fluctuations (search for similar items in EconPapers)
JEL-codes: E24 E30 E32 E52 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (91)

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Working Paper: Expectations and economic fluctuations: an analysis using survey data (2010)
Working Paper: Expectations and economic fluctuations: an analysis using survey data (2010)
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