Chronology of the Last Six Recessions

Abstract

How successful have economists and other business forecasters been in predicting recessions? This question is of considerable practical value since the level of economic activity greatly influences budgets and other plans of businesses. The purpose of this paper is to examine forecasts of economic recessions that have been made over the last 20 years and evaluate the extent to which forecasters have been successful in their predictions. The approach used was to look closely at published forecasts in major business journals or specialized forecasting newsletters. The conclusion of the paper is that forecasters have been somewhat unsuccessful in their efforts to correctly predict the timing and depth of recessions. The implications of such a conclusion are that planners should not pursue the illusion that recessions can be accurately predicted and, instead, they should accept reality and shift the emphasis from attempting to forecast recessions to effectively monitoring the present state of the economy.