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COULD THE START OF THE GERMAN RECESSION 2008-2009 HAVE BEEN FORESEEN? EVIDENCE FROM REAL-TIME DATA

Ulrich Heilemann () and Susanne Schnorr-Bäcker ()
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Ulrich Heilemann: Universität Leipzig
Susanne Schnorr-Bäcker: Statistisches Bundesamt

No 2016-003, Working Papers from The George Washington University, Department of Economics, H. O. Stekler Research Program on Forecasting

Abstract: Given that the Great Recession in Germany was neither predicted nor identified at the time, this paper examines whether data available could have helped to predict or identify the crisis in real time. We inspect forecasts published during April–December 2008 by 12 major institutions, for available data: real-time data from official statistics for Germany and the European Union, major surveys, and indicators. Although annual real GDP forecasts for 2008 were rather accurate, forecasters failed to observe the onset of the recession in Q2 2008, though from May onward, an increasing amount of data—neither ambiguous nor misleading—indicated that the economy was in recession or would likely enter one soon. Nevertheless, forecasters recognised the recession only in mid-November, when the country was already seven months into the recession, thereby confirming forecasters’ ‘low priors about the likelihood of a recession’.

Keywords: Forecast accuracy; Great Recession; real-time analysis; data processing (search for similar items in EconPapers)
JEL-codes: C53 E32 E37 (search for similar items in EconPapers)
Pages: 72 pages
Date: 2016-02
New Economics Papers: this item is included in nep-eec, nep-for, nep-pr~ and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:gwc:wpaper:2016-003

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