OT -- we used to talk quite a bit on this thread about ECRI's recession call a few years. I just got an email from them acknowledging (finally!) that their call was wrong. I am guessing that they must be hurting after maintaining that call for so long in face of evidence that flatly contradicted it--economists and politicians can get away with doing that kind of thing if they aren't being paid to be accurate, but ECRI lives on subscriptions and those must have dropped quite a bit over time. At any rate, I thought some posters here might interested in how they explain their false call. There is a link in the letter that I have not read yet.
Dear Sam,
We'd like to update you on our September 2011 U.S. recession forecast, which turned out to be a false alarm.
Yet, the 2012-13 cyclical downturn turned out to be the worst “non-recession” in half a century – rather than a full-blown recession – because of something that’s unlikely to be repeated.
We’re referring to a collapse in economic cycle volatility to record lows. Even though the Fed’s actions agreed with our outlook, another development, unrelated to the Fed, was the
likely cause of that low volatility.
Please read " The Greater Moderation," our analysis detailing why we had a false alarm, and why, going forward, this has far-reaching implications.
You can also see related coverage from Bloomberg TV and the The New York Times.
Please let us know if you have any questions.
Kind regards,
Melinda Hubman
ECRI
Economic Cycle Research Institute
212.557.7788
businesscycle.com
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