2024-02-20 10:48:00 ET
Summary
- Every state’s economy is, in some degree, unique, although the gravitational pull of the national economy casts a long shadow.
- The most reliable methodology for estimating recession risk in real-time is building an ensemble model that combines various modeling applications that are complementary.
- Despite the caveats, the coincident state model adds another dimension to the mix and provides some complimentary input to The US business Cycle Risk Report’s existing suite of indicators.
What are the choices for monitoring and estimating recession risk? Slightly lower than the number of stars in the universe. Ok, I’m exaggerating, but not much. The good news: the search for robust, relatively reliable indicators narrows the field dramatically. But there’s always more to learn, in part because the supply of data sets is vast, increasingly so. Which brings me to another indicator that looks promising: state coincident indexes....
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Estimating U.S. Recession Risk Using Economic Data For States