Real-Time Macroeconomic Monitoring: Real Activity, Inflation, and Interactions

(with Francis X. Diebold)

Prepared for the American Economic Association 2010 Annual Meeting Session “Revisiting and Rethinking the Business Cycle”.

Published in American Economic Review Papers and Proceedings, May 2010, 100(2), 20-24

We sketch a framework for monitoring macroeconomic activity in real-time and push it in new directions. In particular, we focus not only on real activity, which has received most attention to date, but also on inflation and its interaction with real activity. As for the recent recession, we find that (1) it likely ended around July 2009; (2) its most extreme aspects concern a real activity decline that was unusually long but less unusually deep, and an inflation decline that was unusually deep but brief; and (3) its real activity and inflation interactions were strongly positive, consistent with an adverse demand shock.

First Draft : December 2009


NBER Working Paper 15657 [January 2010]

Most Recent Working Paper (may not be identical to the published version)

Published Version (Requires Subscription)

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