Macroeconomic Patterns and Stories

1. Front Matter

   Pages i-xvi

   PDF

2. Introduction

   1. Introduction: We Are Pattern-Seeking, Story-Telling Animals

      • Edward E. Leamer

      Pages 3-16

3. Four Key Variables: Growth, Unemployment, Inflation and Interest Rates

   1. Gross Domestic Product

      • Edward E. Leamer

      Pages 19-38

   2. The Components of GDP: C+I+G+X−M

      • Edward E. Leamer

      Pages 39-50

   3. Employment

      • Edward E. Leamer

      Pages 51-64

   4. Inflation and Interest Rates

      • Edward E. Leamer

      Pages 65-90

   5. Extrapolative Forecasting

      • Edward E. Leamer

      Pages 91-100

4. A Recession Symptoms

   1. Unwanted Idleness: Recessions and Recoveries

      • Edward E. Leamer

      Pages 103-110

   2. Recession Comparison Charts

      • Edward E. Leamer

      Pages 111-122

   3. Who Struggles and Who Does Well in Recessions?

      • Edward E. Leamer

      Pages 123-135

5. B Recession Stories

   1. Idleness Stories

      • Edward E. Leamer

      Pages 139-153

   2. Cycle Stories

      • Edward E. Leamer

      Pages 155-171

6. C Recession Early Warning Signs

   1. Clues: Temporal Ordering of Components of GDP

      • Edward E. Leamer

      Pages 175-202

   2. More Clues: Episodic Forecasting with Components of Conference Board's Index of Leading Indicators

      • Edward E. Leamer

      Pages 203-216

7. D Recession Causes

   1. The Art of Drawing Causal Inferences from Nonexperimental Data

      • Edward E. Leamer

      Pages 219-229

   2. In Search of Recession Causes

      • Edward E. Leamer

      Pages 231-259

8. Expansions: With and Without Spurts

   1. The Life Cycle of US Expansions: Sputters and Spurts

      • Edward E. Leamer

      Pages 263-280

9. The Longer Run: Savings, Investment, Government Borrowing, Foreign Lending and Your Home

   1. Savings and Investment

      • Edward E. Leamer

      Pages 283-297

   2. Government

      • Edward E. Leamer

      Pages 299-312

   3. The External Deficit and the Value of the Dollar Hu's in Charge?

      • Edward E. Leamer

      Pages 313-328

The story of this book began with my dif?cult transition from teaching international economics and econometrics in Economics Ph. D. programs at Harvard and UCLA to teaching in the MBA programs at the Anderson School at UCLA. On the basis of 20 years of apparent teaching success in Ph. D. education, I arrived at the Anderson School in 1990 with a self-image as a star teacher, but I was greeted with highly disturbingmediocreteachingevaluations. Facedwithadatasetthatwasinconsistent with my view of reality, I did what analysts usually do – I formulated a theory why the data were misleading. Here is how I thought about it. Two aspects of the course – content and amu- ment – drive numerical course evaluations. If you rank courses by the average of the content score and the amusement score, then the component that can be measured most accurately will determine the ranking. Do you understand why? It is what - eraging does: it eliminates the noise. Suppose, for example, that a student cannot tell anything about the content, and the content score is simply a random number, varying from student to student. Those random numbers will average out across students to about the same number for each course. As the average course content score is about the same for every course, it is the amusement score that will drive the rankings.

• Econometrics
• Economic Growth
• Forecast
• Inflation
• MBA
• Pattern Seeking
• Statistics
• Story Telling
• growth

• Anderson School of Management Global Economics & Management Area, University of California, UCLA, Los Angeles, USA

  Edward E. Leamer

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