ECRI Insights
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Over three generations of business cycle research, we have helped to advance the understanding of business cycle dynamics, some of which we have shared publicly.
The excerpts and papers collected here reflect a sampling of important concepts pioneered by our research group.
Ideas
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The Yo-Yo Years
March 2012 | by ECRIThe convergence of two cyclical patterns virtually dictates an era of more frequent recessions in developed economies. As a result, and because of the Bullwhip Effect, growth in developing economies is going to be jerked around more than people think, making for a good deal of cyclical economic contagion. In other words, we are now in the yo-yo years.
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Mr. Greenspan's Blind Spot
March 2011 | by ECRIAlan Greenspan accepts ECRI's long-held criticism that the Fed is chronically behind the curve because of its reliance on core inflation and the output gap. But he is wrong that no indicator can predict when inflation is about to take hold.
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More Frequent Recessions
March 2010 | by ECRIThe convergence of lower trend growth and higher cyclical volatility will lead to more frequent recessions, keeping the jobless rate cycling around high levels and spelling the death of buy-and-hold strategies for stocks.
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When to Put Your Money Under Your Mattress
October 2009 | by ECRIBuying (selling) stocks before recessions (recoveries) based on ECRI's real-time calls would have doubled the returns from a buy-and-hold strategy, beating the S&P by more than eight percentage points a year over the past decade.
Papers
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How Well Does the Yield Curve Predict Recessions? An International Comparison
June 2011 | by ECRIThe yield spread's popularity is due to its "success" in predicting U.S. recessions. Based on ECRI's international recession dates, we find it to be an unreliable predictor of international recessions - especially with rates at zero.
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The Resurrection of Risk
November 2001 | by ECRIBy the turn of the century, many were proclaiming the death of the business cycle. But risk has returned. Because technology and globalization can both reduce and increase risk, both economies and markets will stay volatile.
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The Lead Profile And Other Non-Parametric Tools To Evaluate Survey Series As Leading Indicators
March 1999 | by ECRIBecause leading indexes are intended only to forecast the timing of cycle turning points, they should not be evaluated on the basis of standard parametric statistics like R-squares. We suggest an alternative, nonparametric approach.
ECRI History
Testimonial
Inflation Ahoy! We're indebted to the ECRI, that unnapping watchdog of inflation, for the FIG data.
Nothing in the world compares with ECRI’s insights into the business cycle. Those insights form a key part of our strategic and tactical management of asset class allocations. We have never been disappointed in following what ECRI’s indicators suggest is likely to occur next.
No one speaks with more authority about the economy's turning points.
For ourselves, in this cycle, we'll line up with ECRI.
In the opinion littered world of economic forecasting, ECRI is Mr. Spock – deeply analytical, dispassionate, and accurate.
(ECRI’s) forecast of the [Great] recession helped us anticipate reduced merchandise sales; we proactively revised our inventory forecasts down months ago, and that has helped to greatly minimize the inventory swell and need for markdowns.
