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A Framework That Provides Clarity

During periods of “low visibility,” confusion reigns: for every indication of one trend, there seems to be a countertrend. The key is to glean from the collective wisdom of reliable leading indicators a clear signal that the economy is headed for a turn.

ECRI Insights

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

  • Grand Experiments That Are Too Big to Fail

    January 2016 | by ECRI

    By clinging to unrealistic growth expectations, the economic establishment has effectively bet everything on the success of these grand experiments, and the risk of losing that bet is rising inexorably. Ultimately, only policies that genuinely address the challenges of demographics and productivity have a chance to succeed. It is high time for that discussion to begin.

  • The Yo-Yo Years

    March 2012 | by ECRI

    The 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.

  • Mr. Greenspan's Blind Spot

    March 2011 | by ECRI

    Alan 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.

  • More Frequent Recessions

    March 2010 | by ECRI

    The 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.

  • When to Put Your Money Under Your Mattress

    October 2009 | by ECRI

    Selling (buying) 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

  • Cyclical Misconceptions Driving Policy Errors: Keys to the Productivity Puzzle

    June 2016 | by ECRI

    Policies rooted in overly optimistic assumptions about trend growth and mistaken notions about business cycle dynamics are key to the "productivity puzzle."

  • The "Subpar" Recovery: a Longstanding Misunderstanding

    January 2015 | by ECRI

    There is a near-universal consensus that the U.S. has experienced a "subpar" recovery from the Great Recession. But the pace of that revival has been fairly consistent with historical patterns. In other words, nothing more by way of growth is owed to us by the business cycle.

  • The Yo-Yo Years: More Recessions in the West and Volatility for the Rest

    July 2012 | by ECRI

    The 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 likely to be jerked around more many realize, making for a good deal of cyclical economic contagion. In other words, we are now in the yo-yo years.

  • How Well Does the Yield Curve Predict Recessions? An International Comparison

    June 2011 | by ECRI

    The 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.

  • The Resurrection of Risk

    November 2001 | by ECRI

    By 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.

  • The Lead Profile And Other Non-Parametric Tools To Evaluate Survey Series As Leading Indicators

    March 1999 | by ECRI

    Because 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

ECRI History

Three generations of cycle research.

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Testimonial

(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.
- Fortune 100 Company
Inflation Ahoy! We're indebted to the ECRI, that unnapping watchdog of inflation, for the FIG data.
- Alan Abelson, Barron's
I have to pay attention to those people and indicators that have pointed in the right direction – even when they've gone against the crowd (and my opinion at the time). One such outfit is the Economic Cycle Research Institute, whose various leading indicators actually have done just that – lead where things were headed.
- Randall Forsyth, Barron's
ECRI continues to be an important resource in determining our tactical allocation. For over a decade their economic cycle forecasts and detailed research topics have been a critical part of our decision making process.
- ECRI Professional Member
ECRI [is] the most accurate forecasting institution in the world.
- Sydney Morning Herald
"eerily accurate"
- National Public Radio
           

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